#1Holding company of BANK OF GEORGIA BGEO GROUP Capturing Growth Opportunities Investor Presentation: 3Q15 & 9M15 results www.bgeo.com November 2015#2Disclaimer Forward Looking Statements This presentation contains forward-looking statements that are based on current beliefs or expectations, as well as assumptions about future events. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward- looking statements often use words such as anticipate, target, expect, estimate, intend, plan, goal, believe, will, may, should, would, could or other words of similar meaning. Undue reliance should not be placed on any such statements because, by their very nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results, and JSC Bank of Georgia and/or the Bank of Georgia Holdings' plans and objectives, to differ materially from those expressed or implied in the forward-looking statements. There are various factors which could cause actual results to differ materially from those expressed or implied in forward-looking statements. Among the factors that could cause actual results to differ materially from those described in the forward-looking statements are changes in the global, political, economic, legal, business and social environment. The forward-looking statements in this presentation speak only as of the date of this presentation. JSC Bank of Georgia and Bank of Georgia Holdings undertake no obligation to revise or update any forward-looking statement contained within this presentation, regardless of whether those statements are affected as a result of new information, future events or otherwise. Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 page 2#3Contents BGEO Group PLC | Overview Results Discussion | BGEO Group PLC Results Discussion | Banking Business Results Discussion | Segments Georgian Macro Overview Appendices Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 page 3#4GBP BGEO | Shareholder structure and share price BGEO shareholder structure As of 30 September 2015 17% 3% 2% Top Shareholders As of September 2015 7% 30% ■Unvested and unawarded shares for management and employees ■ Vested shares held by management and employees ■ UK/Ireland 41% ■ US/Canada ■Scandinavia ■ Others Share price performance Up 120% since premium listing¹ 24 18 16 14 12 10 8 222226±20% 22222222NO BGEO LN GDR Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 vay- Jun-15 Jul-15 255555555 BGH has been included in the FTSE 250 and FTSE All-share Index Funds since 18 June 2012 US$ Rank Name Ownership % 1 Schroders Investment Management 10.42 2 Harding Loevner Management LP 9.09 3 Westwood International Advisors 4.34 4 Artemis Investment Management 3.29 5 Firebird Management LLC 3.19 x50 growth in market capitalisation Average daily trading volume Market Capitalisation 10,000,000 9,500,000 1,200 1,060 9,000,000 1,000 8,000,000 7,000,000 6,000,000 5,300,000 5,000,000 4,000,000 3,000,000 US$ millions 800 600 400 2,000,000 2,000,000 950,000 1,000,000 200 21 0 Average daily trading volume 2011 2012 2013 2014 30-Sep-04 5-Oct-15 Share price change calculated from the last price of BGEO LI on 27 February 2012 to the price of BGEO LN on 5th October 2015 2 Market capitalisation for Bank of Georgia Holdings PLC, the Bank's holding company, as of 5th October 2015, GBP/USD exchange rate of 1.5223 page 4#5Renaming the group to reflect 4x20 strategy Platform for Efficiently Allocating Cash & Human Capital BGEO is a Georgia focused bank holding company with investment arm BGEO aims to deliver on its 4X20 strategy by allocating capital efficiently BANK OF GEORGIA HOLDINGS PLC Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 Holding company of BANK OF GEORGIA BGEO GROUP page 5#6BGEO at a glance Group Structure Holding company of BANK OF GEORGIA BGEOⓇ GROUP Banking Business GALT & TAGGART BANK OF GEORGIA CREATING OPPORTUNITIES ALDAGI заказать саспела АЗОБЛО GEORGIAN LEASING COMPANY Retail Banking #1 Retail Bank in Georgia Corporate Banking #1 Corporate Bank in Georgia 5k clients • GEL 2,253.2mln net loans БЕЛАРУСКІ НАРОДНЫ БАНК BELARUSKY NARODNY BANK EXPRESS TECHNOLOGIES Other Banking Businesses P&C Insurance . 2.0mln retail clients Leasing ⚫ GEL 1,607.8mln client deposits 260 branches • 703 ATMs • 2,354 Express Pay terminals Payment Services . IB 7,685 POS terminals 1,053,564 Express cards 1.9mln cards ⚫ GEL 2,751.3mln net loans ⚫ GEL 1,805.8mln client deposits Investment Management Wealth management, research, BNB advisory, brokerage, private equity ⚫GEL 1,347.0mln AUM I GEL 1,016.4mln WM client deposits Plans to divest | from BNB Investment Business GEORGIA HEALTHCARE m² GROUP უძრავი ქონეგა REAL ESTATE GGU Water utility and hydro Healthcare Business #1 Healthcare company in Georgia ⚫ Revenue GEL 171.4mln in 9M15 ⚫ EBITDA GEL 39.6mln Healthcare services • 42 healthcare facilities ⚫ 2,670 beds • Over 3/4 of population covered • Market share of 26.6% by beds Health insurance ⚫38.1% market share • Insuring 270k people Real Estate Business #1 Real Estate company in Georgia • 2 completed projects and 5 under construction Total sales of 1,376 apartments US$ 115.8mln since 2011, of which US$ 58.9mln to be recognised upon completion of projects 99% sale in completed projects 72% pre-sales for on- going 4 projects Total BOG mortgages sold GEL 66.3mln Utilities (GGU) Legacy Investments. Major player on the market • Provides water and wastewater services to 1.4mln people (1/3 of Georgia) • Operates 3 hydro facilities with 143MW capacity Acquired 25% of shareholding © 2014 EBITDA of GEL 51.6mln¹ ⚫ GGU profit (BOG share) of GEL 1.4mln in 3Q15 and GEL 2.1mln in 9M15 Holding company of BANK OF GEORGIA BGEO GROUP www.bgeo.com November 2015 Per GGU management accounts, neither audited or reviewed by auditors or Bank of Georgia Source: Company, financial and operating data is for FY 2014 page 6#74x20 strategy – Strong performance in 2015, 9M We are a Georgia Focused Banking Group with an Investment Arm Banking Business Investment Business 1 ROE ROAE of 23.3% in 3015 c.20% ROAE of 20.6% in 9M15 4 2 Tier I c.20% 3 Retail Growth c.20% 27.7% y-o-y growth on constant currency basis N/A became non-relevant: - 1. Regulation moved to Basel 2/3 2.In the context of excess capital of c. GEL700mln at HoldCo, have efficient capital management at bank 48.0% y-o-y growth Min. IRR of 20% 121% IRR from GHG IPO 65% IRR from m2 Real Estate projects Profit Contribution Target: At least 80% 9M15: GEL 194mln or 90% 9M15: Target: Up to 20% GEL 22mln or 10% Ongoing Dividends Holding company of BANK OF GEORGIA Ordinary dividends: • Dividend 2014 was GEL 2.1/share GEL 80.4mln total, 31.2% payout ratio BGEO www.bgeo.com November 2015 GROUP Capital return: Planned US$ 10mln management trust share buy- back page 7#8BGEO | Robust corporate governance compliant with UK Corporate Governance Code • • Board of Directors of BGEO Group PLC 8 non-executive Supervisory Board members; 8 Independent members, including the Chairman and Vice Chairman Neil Janin, Chairman of the Supervisory Board, Independent Director experience: formerly director at McKinsey & Company in Paris; formerly co-chairman of the commission of the French Institute of Directors (IFA); formerly Chase Manhattan Bank (now JP Morgan Chase) in New York and Paris; Procter & Gamble in Toronto Irakli Gilauri, Group CEO experience: formerly EBRD banker; MS in banking from CASS Business School, London; BBS from University of Limerick, Ireland Hanna Loikkanen, Independent Director experience: Currently advisor to Representative office of East Capital international; previously: Senior executive at East Capital, FIM Group Russia, Nordea Finance, SEB Kaha Kiknavelidze, Independent Director experience: currently managing partner of Rioni Capital, London based investment fund; previously Executive Director of Oil and Gas research team for UBS • David Morrison, Chairman of the Audit Committee, Vice Chairman of the Supervisory Board, Independent Director experience: senior partner at Sullivan & Cromwell LLP prior to retirement Tamaz Georgadze, Independent Director experience: Partner at McKinsey & Company in Berlin, Founded SavingGlobal GmbH, aide to President of Georgia • Al Breach, Chairman of the Remuneration Committee, Independent Director experience: Head of Research, Strategist & Economist at UBS: Russia and CIS economist at Goldman Sachs Bozidar Djelic, Independent Director experience: EBRD's 'Transition to Transition' senior advisory group, Deputy Prime Minister of Serbia, Governor of World Bank Group and Deputy Governor of EBRD, Director at Credit Agricole Holding company of BANK OF GEORGIA . Kim Bradley, Chairman of Risk Committee, Independent Director experience: Goldman Sachs AM, SeniorExecutive at GE Capital, President of Societa Gestione Crediti, Board Chairman at Archon Capital Deutschland BGEO www.bgeo.com November 2015 GROUP page 8#9BGEO Group PLC BGEO | New Management Structure JSC Bank of Georgia Irakli Gilauri, Group CEO, formerly EBRD banker; MS in banking from CASS Business School, London; BBS from University of Limerick, Ireland Archil Gachechiladze, Group CFO and Deputy CEO, Investment Management of JSC Bank of Georgia; formerly Deputy CEO in charge of Corporate Banking, Deputy CEO of TBC Bank, Georgia; Lehman Brothers Private Equity, London; MBA from Cornell University Avto Namicheishvili, Deputy CEO, Group Legal Counsel; previously partner at Begiashvili &Co, law firm in Georgia; LLM from CEU, Hungary Murtaz Kikoria, CEO of Bank of Georgia; previously CEO of Group's healthcare business; c.20 years banking experience including various senior positions at Bank of Georgia Group, Senior Banker at EBRD and Head of Banking Supervision at the National Bank of Georgia Mikheil Gomarteli, Deputy CEO, Retail Banking; 15 years work experience at BOG Sulkhan Gvalia, Deputy CEO, Corporate Banking; formerly Chief Risk Officer, c.20 years banking experience founder of TUB, Georgian bank acquired by BOG in 2004 Georgia Healthcare Group Nikoloz Gamkrelidze, CEO, Georgia Healthcare Group; previously Group CFO, CEO of Aldagi BCI and JSC My Family Clinic; World Bank Health Development Project; Masters degree in International Health Management from Imperial College London, Tanaka Business School George Chiladze, Deputy CEO, Chief Risk Officer; formerly Deputy CEO in Finance, Deputy CEO at Partnership Fund, Programme trading desk at Bear Stearns NY, Ph.D. in physics from John Hopkins University in Baltimore Levan Kulijanishvili, Chief Financial Officer 15 5 year of experience at BOG. Formerly Head of Security and Internal Audit at Bank of Georgia; Holds MBA from Grenoble School of Business, in Grenoble, France m2 Real Estate Irakli Burdiladze, CEO, m2 Real Estate; previously CFO at GMT Group, Georgian real estate developer; Masters degree from Johns Hopkins University Tornike Gogichaishvili, Chief Operating Officer Previously CEO of Aldagi and CFO of BG Bank, Ukraine; Holds Executive Diploma from Said Business School, Oxford Senior Executive Compensation Policy applies to top executives and envisages long-term deferred and discretionary awards of securities and no cash bonuses to be paid to such executives Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 page 9#10Contents BGEO Group PLC | Overview Results Discussion | BGEO Group PLC Results Discussion | Banking Business Results Discussion | Segments Georgian Macro Overview Appendices Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 page 10#113Q15 P&L BGEO | P&L results highlights BGEO Group Consolidated Change Banking Business Investment Business Income Statement 3Q15 3Q14 y-o-y 2Q15 Change q-o-q Change Change Change Change 3Q15 3Q14 y-o-y 2Q15 q-o-q 3Q15 3Q14 y-o-y 2Q15 q-o-q Net banking interest income 126,178 88,377 42.8% 122,789 2.8% Net fee and commission income 30,791 27,371 12.5% 29,121 5.7% 129.249 89,977 31,061 27,798 43.6% 126,403 2.3% 11.7% 30,172 2.9% Net banking foreign currency gain 18,675 13,431 39.0% 19,765 -5.5% 18,675 13,431 39.0% 19,765 -5.5% Net other banking income 4,938 1,291 NMF 2,481 99.0% 5,231 1,324 295.1% 2,810 86.2% Gross insurance profit 9,783 9,684 1.0% 5,817 68.2% 5,829 3,757 55.2% 3,473 67.8% Gross healthcare profit 22,118 14,237 55.4% 18,099 22.2% Gross real estate profit 751 1,254 -40.1% (41) Gross other investment profit 3,373 3,577 -5.7% 4,734 NMF -28.7% 751 4,498 22,118 14.237 1,254 6,389 -29.6% 2,799 55.4% 18,099 -40.1% 60.7% 22.2% (41) NMF 3,229 3,580 -9.8% 4,709 -31.4% Revenue 216,607 159,222 36.0% 202,765 6.8% 190,045 136,287 39.4% 182,623 4.1% 30,596 25,460 20.2% 25,566 19.7% Operating expenses (77,562) (65,563) 18.3% (76,848) 0.9% (66,167) (54,718) 20.9% (65,244) 1.4% (12,244) (11,484) 6.6% (12,381) -1.1% Operating income before cost of credit risk / EBITDA 139,045 93,659 48.5% 125,917 10.4% 123,878 81,569 51.9% 117,379 5.5% 18,352 13,976 31.3% 13,185 39.2% Profit from associates 1,444 1,979 -27.0% 1,444 1,979 -27.0% Depreciation and amortization of investment business (4,227) (2,352) 79.7% (2,579) 63.9% (4,227) (2,352) 79.7% (2,579) 63.9% Net foreign currency gain (loss) from investment business (2,311) (281) NMF 2,689 NMF (2,311) (281) NMF 2,689 NMF Interest income from investment business Interest expense from investment business Operating income before cost of credit risk Cost of credit risk Profit Earning per share (basic). 9M15 P&L 499 (2,080) 252 (1,872) 98.0% 622 -19.8% 11.1% (2,632) 132,370 89,406 48.1% 125,996 -21.0% 5.1% 719 (5,485) 406 77.1% 844 -14.8% (3,912) 40.2% (7,501) -26.9% 8,492 7,837 8.4% 8,617 -1.5% (35,647) (15,305) 132.9% (41,867) -14.9% 80,905 2.04 62,308 1.74 29.8% 17.2% 72,030 1.84 12.3% 10.9% (34,752) (14,863) 73,402 55,635 133.8% (40,764) 31.9% 61,453 -14.7% (895) (442) 102.5% (1,103) -18.9% 19.4% 7,503 6,673 12.4% 10,577 -29.1% BGEO Group Consolidated Banking Business Investment Business Change Income Statement 9M15 9M14 y-o-y 9M15 9M14 Change y-o-y 9M15 9M14 Change y-o-y Net banking interest income 369,956 251,825 46.9% 378,710 256,208 47.8% Net fee and commission income 86,767 73,433 18.2% 89,324 75,090 19.0% Net banking foreign currency gain 57,401 36,131 58.9% 57,401 36,131 58.9% Net other banking income 9,209 4,397 109.4% 10,137 4,743 113.7% Gross insurance profit 23,174 25,742 -10.0% 14,606 11,948 22.2% 9,990 15,116 Gross healthcare profit 57,094 37,175 53.6% 57,094 37,175 -33.9% 53.6% Gross real estate profit 1,919 10.833 -82.3% 1,919 10,913 -82.4% Gross other investment profit 9,506 9,439 0.7% 9,481 9,321 1.7% Revenue 615,026 448,975 37.0% Operating expenses (230,470) (187,766) 22.7% Operating income before cost of credit risk / EBITDA Profit from associates 384,556 261,209 47.2% 550,178 (196,687) 353,491 384,120 43.2% 78,484 72,525 8.2% (158,493) 24.1% (36,282) (31,219) 16.2% 225,627 56.7% 42,202 41,306 2.2% 2,112 2,112 Depreciation and amortization of investment business (9,494) (6,837) 38.9% (9,494) (6,837) 38.9% Net foreign currency gain (loss) from investment business 4,067 (2,130) NMF 4,067 (2,130) NMF Interest income from investment business 1,738 984 76.6% 2,381 1,386 71.8% Interest expense from investment business Cost of credit risk Profit Earnings per share (basic) (7,171) (5,621) 27.6% (18,951) (11,747) 61.3% (119,356) 215,274 5.51 (42,468) 174,289 181.0% 4.89 23.5% 12.7 (116,287) 193,666 (40,942) 155,528 184.0% (3,069) (1,526) 101.1% 24.5% 21,608 18,761 15.2% Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 *Note: Banking Business and Investment Business financials do not include interbusiness eliminations. Detailed financials, including interbusiness eliminations are provided in annexes. page 11#123Q15 BS BGEO | Balance sheet highlights Balance Sheet BGEO Group PLC Change Change Banking Business Change Investment Business Change Change Change Sept-15 Sept-14 y-0-y Liquid assets Loans to customers Accounts receivable and other loans Insurance premiums receivable 2,924,784 1,749,381 5,266,125 3,818,742 67.2% 37.9% Jun-15 q-o-q 2,741,533 6.7% Sept-15 Sept-14 y-o-y Jun-15 q-o-q Sept-15 Sept-14 y-o-y Jun-15 q-o-q 2,913,651 1,728,730 5,052,752 4.2% 5,367,311 3,897,160 87,348 62,830 39.0% 77,866 12.2% 13,291 6,501 68.5% 37.7% 104.4% 2,726,749 5,142,221 15,474 -14.1% 6.9% 186,812 75,514 147.4% 127,508 46.5% 4.4% 0.0% 0.0% 79,989 57,041 40.2% 70,343 13.7% 55,700 36,555 52.4% 58,142 -4.2% 28,413 14,961 89.9% Prepayments 40,330 34,945 15.4% 52,145 -22.7% 21,374 19,928 7.3% Inventories 148,777 85,132 74.8% 131,534 13.1% 10,929 6,122 78.5% Investment property 224,028 185,316 20.9% 221,506 1.1% 143,469 121,359 Property and equipment Total assets 775,599 9,937,889 6,815,670 562,342 37.9% 45.8% 669,153 15.9% 9,375,059 6.0% 339,300 Client deposits and notes 4,477,908 3,088,254 45.0% 4,104,417 9.1% 9,140,036 4,649,572 Amounts due to credit institutions 2,115,859 1,264,299 67.4% 2,139,517 -1.1% 2,011,801 301,004 6,340,444 3,142,980. 1,167,556 Debt securities issued Accruals and deferred income 1,076,137 166,435 794,951 35.4% 1,063,123 1.2% 999,959 768,315 18.2% 12.7% 44.2% 47.9% 72.3% 30.1% 98,953 68.2% 132,832 25.3% 16,629 13,028 27.6% Insurance contracts liabilities 66,608 57,637 15.6% 73,001 -8.8% 40,369 35,099 15.0% Total liabilities Total equity Book value per share Key Ratios 8,179,930 5,487,439 49.1% 1,757,959 43.60 1,328,231 36.97 32.4% 17.9% 7,719,116 1,655,943 6.0% 7,891,998 5,255,808 50.2% 7,463,969 26,519 7.1% 30,779 -30.6% 10,379 5.3% 143,873 -0.3% 338,858 0.1% 8,712,710 4.9% 4,212,822 10.4% 2,045,093 -1.6% 990,257 1.0% 14,369 15.7% 42,910 -5.9% 5.7% 29,165 22,636 28.8% 32,023 -8.9% 18,956 15,017 26.2% 21,366 -11.3% 137,848 79,010 74.5% 121,155 13.8% 80,559 63,957 26.0% 77,633 3.8% 436,299 1,094,685 261,338 66.9% 330,295 32.1% 611,191 79.1% 883,373 23.9% 0.0% 0.0% 209,898 175,299 19.7% 189,124 11.0% 83,549 27,023 209.2% 79,894 4.6% 149,806 85,925 74.3% 118,463 26.5% 26,239 22,538 16.4% 30,091 -12.8% 584,764 367,597 59.1% 476,171 22.8% 6.2% 1,248,038 1,084,636 15.1% 1,248,741 -0.1% 509,921 243,594 109.3% 407,202 25.2% 41.74 4.5% Banking Business Ratios ROAA ROAE Net Interest Margin Loan Yield Cost of Funds 3Q15 3Q14 2Q15 9M15 9M14 3.3% 3.5% 2.9% 3.1% 3.3% 23.3% 21.0% 19.3% 20.6% 19.8% 7.6% 7.6% 7.6% 7.7% 7.5% 14.7% 14.2% 14.6% 14.7% 14.4% 5.1% 4.7% 5.0% 5.1% 4.8% Cost of Customer Funds 4.1% 4.1% 4.4% 4.3% 4.3% Cost of Amounts Due to Credit Institutions 6.3% 4.8% 5.3% 5.7% 4.8% Cost / Income 34.8% 40.1% 35.7% 35.7% 41.3% NPLs To Gross Loans To Clients 4.0% 3.8% 4.1% 4.0% 3.8% NPL Coverage Ratio 82.0% 78.1% 82.2% 82.0% 78.1% NPL Coverage Ratio, adjusted for discounted value of collateral 121.9% 112.1% 115.1% 121.9% 112.1% Cost of Risk 2.5% 1.6% 2.7% 2.8% 1.2% Tier I capital adequacy ratio (BIS) 16.7% 22.7% 20.4% 16.7% 22.7% Total capital adequacy ratio (BIS) 23.7% 26.4% 26.7% 23.7% 26.4% Tier I capital adequacy ratio (New NBG, Basel II) 10.2% 11.2% 10.4% 10.2% 11.2% Total capital adequacy ratio (New NBG, Basel II) 15.8% 14.2% 15.9% 15.8% 14.2% Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 page 12#13BGEO BGEO | Strong revenue growth, with positive operating leverage Revenue nine-month | Revenue quarterly BGEO GEL millions +37.0% +43.2% +8.2% 700 615.0 600 78.5 Investment business 6.0 449.0 166.1 500 72.5 400 300 550.2 Banking business 200 384.1 100 0 (7.7) Revenue 9M14 Eliminations (13.6) Banking Business Investment Business Revenue 9M15 -100 Change y-o-y Operating expenses | nine-month BGEO GEL millions +22.7% +24.1% +16.2% 250 187.8 230.5 36.3 38.2 5.1 Investment business 200 31.2 150 100 158.5 50 196.7 Banking business Eliminations 0 (1.9) (2.5) Operating expenses Banking Business Investment Business Operating expenses -50 9M14 9M5 Change y-o-y Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 GEL millions GEL millions +36.0% +39.4% +20.2% 216.6 230 30.6 5.1 Investment business 180 159.2 53.8 25.5 130 80 136.3 30 190.0 Banking business Eliminations (2.5) -20 Revenue 3Q14 Banking Business Investment Business (4.0) Revenue 3Q15 Change y-o-y Operating expenses | quarterly BGEO +18.3% +20.9% +6.6% 77.6 80 65.6 70 11.4 0.8 12.2 Investment business 60 11.5 50 40 30 54.7 66.2 Banking business 20 10 Eliminations 0 (0.6) -10 Operating expenses Banking Business 3Q14 Investment Business Change y-o-y (0.8) Operating expenses 3Q15 page 13#14GEL millions 30-Sep-14 RB GEL millions BGEO | Strong profitability Profit | nine-month Profit quarterly BGEO BGEO +23.5% +29.8% 9.4% 64.0% 3.8% 42.4% 54.5% NMF x5.7 28.7% 37.5% -33.6% 124.7% 7.1% NMF x3.6 90 80.9 215.3 Inv Business. 80 7.5 200 6.6 21.6 -1.6 2.8 174.3 -3.6 Inv business 18.6 18.8 150 104.1 100 58.6 155.5 50 19.8 11.2 193.7 Bank business GEL millions 70 62.3 6.2 60 6.7 8.7 3.6 50 38.9 40 22.2 30 Bank Business 73.4 55.6 20 10 0 9M14 RB CB IM Other BB GHG m2 Other IB 9M15 Change y-o-y 0 3Q14 RB CB IM Other BB Change y-o-y GHG m2 Other IB 3Q15 Equity-excl. Non-controlling interest BGEO +31.2% 2,000 1,800 1,600 1,271 1,400 1,200 205 1,000 800 600 1,066 400 525 566 200 0 23.4% 15.1% 86.6% 20.9% 12.7% NMF 18.9 n/a 1,668 111 439 78 59 Iny business • 191 118 20 1,229 Bank business IM Other BB ROAE 9M15 Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 GHG M2 Other IB BGEO unallocated 30-Sep-15 Key takeaways 9M15 profit increased to GEL 215.3mln, up 23.5% y-o-y and 3Q15 profit increased to GEL 80.9mln, up 29.8% y-o-y driven by strong performance of CB and GHG segments GEL 1,668mln capital allocation: 73.7% and 26.3% to Banking Business and Investment Business, respectively Equity increased to GEL 1,668mln, up 31.2% driven by GEL 212.2mln increase in retained earnings and GEL 219.0mln capital raise completed in December 2014 page 14#15GEL millions GEL millions Assets BGEO | Balance Sheet, 30 September 2015 BGEO 12,000 10,000 8,000 6,815.7 611.2 6,000 4,000 6,340.4 2,000 45.8% 79.1% 44.2% Banking Business 9,937.9 10,000 1,094.7 9.0% 44.2% 9,140.0 8,000 859.1 9.4% 6,340.4 20.3% 6,000 714.6 9,140.0 93.0% 4,000 37.7% 5,367.3 58.7% 3,897.2 2,000 68.5% 31.9% 0 2,913.7 (136.0) 1,728.7 -2,000 30-Sep-14 (296.8) 30-Sep-15 0 30-Sep-14 30-Sep-15 ■Banking Business assets ■Investment Business assets Liabilities ■Liquid assets ■Net loans Other assets GEL millions GHG M2 Real Estate 618.3 600.0 300.0 264.0 500.0 194.3 31.4% 250.0 71.9 27.2% 400.0 200.0 29.2% 300.0 150.0 77.2 200.0 423.9 68.6% 100.0 43.6% 100.0 50.0 115.0 0.0 0.0 30-Sep-15 PPE Other assets BGEO 12,000 10,000 Banking Business 10,000.0 GHG 8,000 49.1% 8,179.9 4.5% 8,000.0 50.2% 7,892.0 600.0 584.8 6,000 5,487.4 59.1% 6,000.0 30.4% 230.7 2.9% 1,000.0 12.7% 367.6 5,255.8 30.1% 4,000 50.2% 96.5% 4,000.0 177.0 768.3 7,892.0 72.3% 2,011.8 25.5% 2,000 5,255.8 1,167.6 2,000.0 -2,000 0 (136.0) 30-Sep-14 3,143.0 47.9% 4,649.6 GEL millions 500.0 369.3 400.0 (296.8) 30-Sep-15 58.9% 30-Sep-14 Banking Business liabilities Investment Business liabilities Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 30-Sep-15 Other liabilities Debt securities issued ■Amounts due from credit institutions. ■Client Deposits and Notes 300.0 30-Sep-15 ■Inventories Investment properties Other assets M2 Real Estate 250.0 186.4 200.0 2.1% 3.8 300.0 148.4 40.2% 150.0 131.3 70.4% 200.0 100.0 59.8% 100.0 221.0 50.0 51.3 27.5% 0.0 30-Sep-15 Other liabilities ■Borrowed funds 0.0 30-Sep-15 Other liabilities Accruals and deferred income ■Borrowed funds page 15#16Contents BGEO Group PLC | Overview Results Discussion | BGEO Group PLC Results Discussion | Banking Business Results Discussion | Segments Georgian Macro Overview Appendices Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 page 16#17BOG | The leading bank in Georgia ■ Leading market position: No. 1 bank in Georgia by assets (34.7%), loans (32.7%), client deposits (31.9%) and equity (31.5%)¹ ■ Underpenetrated market with stable growth perspectives: Real GDP average growth rate of 5.8% for 2004-2014. Geostat estimates 4.8% GDP growth in 2014. Loans/GDP grew from 9% to 44% in the period of 2003-2014, still below regional average; Deposits/GDP grew from 8% to 40% over the period Strong brand name recognition and retail banking franchise: Offers the broadest range of financial products to the retail market through a network of 260 branches, 703 ATMs, 2,354 Express Pay Terminals and c.1.9 million customers (includingc.400,000 Privatbank customers) as of 30 September 2015 ■The only Georgian company with credit ratings from all three global rating agencies: S&P: 'BB-', Moody's: 'B1/Ba3' (foreign and local currency), Fitch Ratings: ‘BB-'; outlooks are 'Stable' High standards of transparency and governance: The only entity from Georgia to be listed on the premium segment of the Main Market of the London Stock Exchange (LSE:BGEO) since February 2012. LSE listed through GDRs since 2006 ■ Only private entity to issue Eurobonds from the Caucasus: US$400 million Eurobonds outstanding including US$150 raised through a tap issue in November 2013. The bonds are currently trading at a yield of c.5.4% ■ Sustainable growth combined with strong capital, liquidity and robust profitability Balance Sheet Banking Business GEL million +14.9% +8.4% +19.2% +13.1% +16.7% 9,140 5,367 4,441 4,650 3,567 3,482 2,914 3,127 3.141 1,904 2,724 1,596 1,875 10,000 9,000 8,000 7,044 7,000 6,158 6,000 5,333 5,000 4,000 3,000 1.231 2,000 903 1,064 1,248 1,000 0 Total assets Liquid assets Net loans to Client deposits Total equity customers ■31-Dec-14 ■30-Sep-15 CAGR 2012-2014 ■31-Dec-12 Income Statement Banking Business GEL million 31-Dec-13 +39.4% 190.0 182.6 +10.3% +14.5% 600 538 488 200 500 444 180 160 136.3 400 140 221 120 300 100 193 80 200 171 60 40 100 20 0 0 Revenue Revenue Profit 2012 2013 2014 3Q14 ■2015 3Q15 1E1 +31.9% 73.4 55.6 61.5 Profit Change y-o-y Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 'Market data based on standalone accounts as published by the National Bank of Georgia (NBG) as of 30 September 2015 www.nbg.gov.ge page 17#18BOG | Leading the competition across the board Peer group's market share in total assets Peer group's market share in gross loans 40% 36.7% 35% 33.8% 34.7% 32.6% 30% 25.8% 24.5% 26.9% 23.7% 25% 20% 15% 10% 5% 0% CL 606 BANK OF GEORGIA TBC mnanun 5630 BANK hend 6M ProCredit Bank #1 40% 35.4% 35% BOG 30% 32.5% 32.7% 32.2% 28.3% 25.2% 26.2% % 25% 19.3% 17.9% 20% 16.2% 14.7% 15% 5.1% 7.3%.0% 6.1% 4.8% 5.5% 6.2% 5.8% 7.8% 7.7% 6.3% 10% 6.3% 4.9% 3.894.8% 4.9% 8.3% 6.7% 5.7% 6.6% 7.0% 6.7% 7.2% 6.2%5.8% 4.6% 5.8% 5% 0% 56 FOL BANK REPUBLIC 30 UPUCO (OBORI • СЛЪЗНОМ ВЗЕМ LIBERTY BANK VTB LodoHOEXC 6060 Others BANK OF SEORGIA mnanun 5630 TBC BANK ProCredit Bank 2012 2013 ■2014 Q3 2015 Foreign banks market share by assets 2006 No state ownership of Foreign banks, 32.0% commercial banks since Local banks, 1994 68.0% Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 ■2012 ■2013 #1 BOG 17.79.1% 16.3% 14.7% 4.8% 4.8% 5.0% 4.8% 4.2% 56 FLS BANK REPUBLIC Chahon 63650 LIBERTY BANK утв Others 360 UZ OBORN ■2014 Q3 2015 Peer group's market share in client deposits 3Q 2015 35% 33.1% 31.9% 31.5% 30.7% 30.4% 28.6% 30% 28.8.8% 25% Foreign 20% banks, 25.4% 15% 11.8% 12.0% 9.0% 9.5% 10% 6.9%.8% 5.1% 5.6% 5.3% 5.3% 5.0% 4.8% Local banks, 74.6% 5% 0% mnanun 5630 BANK OF GEORGIA TBC BANK ProCredit Bank | 256375 BANK REPUBLIC В СЛУЗНОМ ВЗЕМ LIBERTY BANK 362 un ■2012 2013 2014 Note: All data based on standalone accounts as reported to the National Bank of Georgia and as published by the National Bank of Georgia www.nbg.gov.ge ■Q3 2015 6.1% 5.4% 5.4% 3.8% #1 BOG 15.2% 12.6% 12.7% 10.0% VTB Others page 18#19Banking Business | Diversified asset structure Total asset structure | 30 September 2015 Banking Business Total: GEL 9.1bln Other assets Liquid assets | 30 September 2015 Banking Business Total: GEL 2.9bln Other liquid assets 3.0% 9.4% Loans to customers, net 58.7% Liquid assets 31.9% Loans breakdowns | 30 September 2015 Banking Business Total Loans breakdown by segments Total: GEL 5.5bln Retail Banking Loans breakdown by product Total: GEL 2.8bln Legacy retail loans Other loans 2% 0% Card overdrafts 1% Credit card balances 10% Retail loans, GEL 2,979.2 mln, 53.7% Corporate loans, GEL 2,570.0 mln, 46.3% Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 Car loans (auto+) 1% POS loans 4% Government bonds, treasury bills, NBG CDs 27.9% Cash and equivalents 45.1% Amounts due from credit institutions 24.0% SME loans 12% Health and social work 4.2% Mining and quarrying. Other 15.4% 4.6% Financial intermediation Micro loans 20% Mortgage loans 28% 2.8% Construction 5.4% Electricity, gas. and water supply Consumer loans 22% Corporate Banking Loans breakdown by sectors Total: GEL 2.3bln Manufacturing 27.1% Trade 3.3% Transport & 16.3% 5.7% Communication Hospitality 5.1% Real estate 10.1% *Retail loans include loans of Retail Banking segment, BNB retail loans, Investment Management and Affordable Housing Mortgages, Corporate loans include Corporate Banking Segment and BNB Corporate loans page 19#20Banking Business | US$ loan portfolio breakdown Highlights 44.1% of Retail Banking Loans were denominated in USD loans with non-USD income* We offered re-profiling in Feb-2015. Since, 992 loans (out of 14,000) were re-profiled, with total value of US$34.9mln For RB: Loans 15 days past due were 1.4% at 30 September 2015, compared to 1.4% a year ago and 1.4% as of 30 June 2015 42.1% of Corporate Banking Loans denominated in USD loans with non-USD income Retail Banking and Wealth Management | 30 Sep 2015 Banking Business Corporate Banking | 30 Sep 2015 Banking Business Total 2,824 58 2.05% Total 2,361 110 4.65% GEL mln GEL mln 100% 100% 20 0.4 143 13 266 80% 2.14% 80% 17 9.41% Other 1,365 Other 60% 46 60% ■GEL GEL 40% 3.35% 40% 1,957 79 6.65% USD 1,439 20% ■USD 20% 12 0.85% 4.03% 0% 0% Loan portfolio Provision amount LLR rate Loan portfolio Provision amount LLR rate % of total RB Loan Amounts in GEL millions GEL and other currency loans* portfolio 1.389 RB loan portfolio Consumer SME & CB Loan Mortgages loans* Micro Amounts in GEL millions portfolio % of total CB loan portfolio 49.1% 78 974 332 USD loans with USD income 193 6.8% 122 29 42 USD loans with non-USD income Total 1,246 44.1% 588 151 508 2,828 100.0% 788 1.154 882 GEL and other currency loans* USD loans with USD income USD loans with non-USD income Total 403 17.1% 1,170 49.6% 787 33.4% 2,361 100.0% *includes credit cards Note: standalone BOG figures from management accounts Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 *Re-profiling implies effectively increasing the tenor of the loan so that monthly payment in Lari stays at the same level it was prior to the recent devaluation of the Lari. When re-profiling, we do not change the interest rate of the loan. We offered reprofiling in Feb 2015 page 20#21NPLs Banking Business GEL thousand Banking Business | Resilient loan portfolio quality NPL composition Banking Business 221.7 250 250 7.9% 7.9% 9% 7.6% 7.7% 8% 200 200 7% 153.6 144.9 150 126.3 6% 5% 4% 100 3.9% 3.9% 4.0% 3% 3.4% GEL thousand 00 2% 50 1% 0 0% 2012 2013 2014 9M 2015 NPLs NPLs to gross loans Net Interest Margin Loan loss reserve Banking Business GEL thousand 221.7 30.2 144.9 153.6. 150 126.3 7.9 12.0 4.5 151.7 100 100.0 120.9 122.7 50 39.8 21.8 16.1 18.9 0 2012 2013 2014 9M 2015 NPLS RB & WM NPLS CB NPLs Other NPL coverage ratio Banking Business 200 180 181.8 5% 3.9% 3.9% 140.0% 4% 121.9% 3.4% 111.5% 4.0% 109.6% 110.6% 160 3.3% 4% 120.0% 140 3.4% 120.0 3% 100.0% 86.3% 109.1 3.3% 82.8% 82.0% 120 103.8 3% 67.5% 80.0% 100 2.3% 2% 80 60.0% 2% 60 40.0% 1% 40 1% 20.0% 20 0 0% 0.0% 2012 2013 2014 9M 2015 2012 2013 2014 9M 2015 Loan loss reserves (LLR) NPLs to gross loans NPL coverage ratio LLR as % of gross loans NPL coverage ratio, discounted for value of collateral Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 *Retail loans include loans of Retail Banking segment, BNB retail loans, Investment Management and Affordable Housing Mortgages, Corporate loans include Corporate Banking Segment and BNB Corporate loans page 21 (1/2)#22GEL millions 140 120 100 80 40 Banking Business | Resilient loan portfolio quality Cost of Credit Risk | nine-month Banking Business Cost of Credit Risk | quarterly Banking Business +184.0% 116.3 17.9 60.9 55.7 43 40.9 +140.2% 98.4 y-o-y 20 0 2012 2013 2014 9M14 9M15 Devaluation effect Like-for-like GEL millions -14.7% 50 45 40.8 40.8 40 35 11.9 34.8 6.0 30 22222 no 8.2 15 10 20.7 14.9 5 -29.4% like-for-like 28.8 0 3Q14 1Q15 2Q15 3Q15 Devaluation effect Privatbank Like-for-like Cost of Risk | nine-month Banking Business Cost of Risk quarterly Banking Business +160 bps 4.0% 4.0% -20 bps 3.5% 3.5% 3.1% 2.7% 2.8% 3.0% 3.0% 2.5% 0.4% 0.9% 2.5% 2.5% 0.4% 2.0% 2.0% 1.6% 0.6% -60 bps 1.5% +120 bps 1.3% 1.3% 1.5% 1.2% 1.2% like-for-like 2.1% y-o-y 2.4% 1.6% 1.0% 1.0% 0.5% 0.5% 0.0% 2012 2013 2014 9M14 9M15 0.0% 3Q14 1Q15 2Q15 Devaluation effect Like-for-like Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 3Q15 Devaluation effect Privatbank Like-for-like page 22#23GEL millions Banking Business | Strong liquidity Liquid assets to total liabilities Banking Business NBG liquidity ratio Banking Business 9,000 36.0% 37.4% 36.9% 40% 7,892 32.3% 8,000 35% 7,000 5,813 30% 6,000 5,094 25% 5,000 4,430 20% 4,000 2,914 15% 3,000 1,904 1,875 1,596 10% 2,000 1,000 5% 0 0% 2012 2013 2014 9M 2015 Liquid assets Total liabilities Liquid assets to total liabilities Net loans to customer funds Banking Business Bank Standalone, GEL mln 5,000 4,500 41.1% 4,000 3,415 3,500 3,166 3,000 2,500 2,000 1.562 1,302 1,500 1,000 353 500 0 2012 Liquid assets (NBG) Excess liquidity NBG min requirement (1/2) 4,662 50% 45.7% 45% 35.0% 3,558 40.5% 40% 35% 30% 25% 1,890. 20% 1,245 15% 537 10% 491 178 5% 0% 2013 2014 9M 2015 Liabilities (NBG) Liquid assets liabilities ≥ 30% Net loans to customer funds & DFIS Banking Business 140% 127.5% 140% 130% 130% 114.8% 115.4% 113.6% 120% 120% 108.6% 110% 110% 96.8% 95.9% 100% 100% 92.5% 90% 90% 80% 80% 70% 70% 60% 60% 50% 50% 40% 40% 2012 2013 2014 9M 2015 2012 2013 2014 9M 2015 Net loans to customer funds, consolidated Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 Net loans to customer funds & DFIs, consolidated page 23#24Banking Business | Strong liquidity Liquidity coverage ratio & net stable funding ratio JSC Bank of Georgia standalone Foreign currency VaR analysis* JSC Bank of Georgia standalone 250% 218.0% 160.8% 200% 163.8% 150% 115.8% 105.9% 100% 50% 214.7% 108.6% 104.5% 0% 2012 2013 2014 9M 2015 ■Liquidity coverage ratio ■Net stable funding ratio Cumulative maturity gap, 30 June 2015 Banking Business GEL thousands 1,000,000 883,738 803,675 753,275 800,000 600,000 400,000 11.6% 200,000 H 10.6% 9.9% 0 GEL thousands 3,500 3,000 2,500 2,000 1,500 1,000 500 0 (2/2) 3,100.5 3,077.7 2,952.6 2,574.1 2,633.9 2,421.7 2,224.7 2,162.8 2,204.7 2,252.5 1,029.4 1,036.8 839.4 902.7 562.5 475.5 383.3 30-Sep-14 578.8 601.8 615.6 6361 135.3 53.2 105.4 220.4 31-Oct-14 30-Nov-14 31-Dec-14 R31-Jan-15 Monthly VaR GEL (Average) VaR Limit 28-Feb-15 31-Mar-15 Open currency position JSC Bank of Georgia standalone 1,593,6 30-Apr-15 31-May-15 30-Jun-15 31-Jul-15 31-Aug-15 30-Sep-15 25% 1.4% 40,000 4% 20% 12,173 -11,394 -12,578 627,424 2% 0 15% 0% 10% 8.3% 5% -3.6% -3.7% 0% GEL thousands -40,000 -2% -1.3% -1.4% -4% -155,413 -80,000 -6% -120,000 -8% -10% -5% -160,000 -12% -11.6% (275,946) (282,972) -10% -200,000 -14% 2012 2013 2014 9M 2015 >3 Years FC net position, on and off balance, total As % of NBG total regulatory capital (old) -200,000 -400,000 Holding company of BANK OF GEORGIA On Demand 0-3 Months 3-6 Months 6-12 Months 1-3 Years Maturity gap Maturity gap, as % of total assets BGEO www.bgeo.com GROUP *Daily VaR time series averaged for each respective month November 2015 page 24#2510.0 Banking Business | Funding structure is well established Interest Bearing Liability structure | 9M 2015 Banking Business Interest Bearing Liabilities GEL 7.9 bn Debt securities Other liabilities, issued, GEL GEL 230.6 mln, 1,000.0 mln, Borrowings, GEL 1,068.7 mln, 13.5% 12.7% 2.9% Current account & Client deposits & notes, GEL demand deposits 4,649.6 mln, 49.94% 58.9% Well diversified international borrowings | 3Q15 Banking Business European Bank for Reconstruction and Development OPIC Other debt securities, GEL 53.1 mln, 2.6% Time deposits 50.6% DEG KFW-GRUPPE CIFC FMO ADB World Business Capital Financing Business Acress Borders EFSE Eurobonds, GEL 946.9 mln, 45.8% Others borrowings, GEL 118.8 mln, 5.7% DFIs, GEL 949.9 mln, 45.9% USD millions Other amounts due to credit institutions, GEL 943.1 mln, 12.0% Borrowed funds maturity breakdown* Banking Business Excl. US$400 mln Eurobonds maturing in 2017 • Finance for Development EUROPIAN FUND FOR SOUTHEAST EUROPE Interest bearing liabilities Banking Business has a well-balanced funding structure with 58.9% of interest bearing liabilities coming from client deposits and notes, 12.0% from Developmental Financial Institutions (DFIs) and 12.0% from Eurobonds, as of 30 September 2015 The Bank has also been able to secure favorable financing from reputable international commercial sources, as well as DFIs, such as EBRD, IFC, DEG, Asian Development Bank, etc. As of 30 September 2015, US$ 71.9 million undrawn facilities from DFIs with one to seven year maturity 100 40 BRERO 2.3% 4% 2.0% 1.7% 90 0.7% 1.6% 1.2% 80 0.6% 0.1% 0.0% 0.0% 2% 75.0 90.0 70 62.6 65.0 0% • 60 -2% 50 47.8 10.0 -4% 25.4 30 23.3 -6% • 20 37.8 1.9 1.0 0.8 -8% 10 -10% 2015 2016 2017 2018 2019 2020 2021 2022 2023 2025 Senior Loans Subordinated Loans % of Total assets Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 * Consolidated, converted at GEL/USS exchange rate of 2.3816 of 30 September 2015 ** Total Assets as of 30 September 2015 page 25#26Banking Business | Strong revenue growth Revenue growth | nine-month Banking Business Revenue growth | quarterly Banking Business GEL millions +43.2% 550.2 400 600 ཙྩཾ ྣ ༈ རྩེ ༔ ཎྜ ° 500 384.1 171.5 +34.1% 300 127.9 200 +47.8% 378.7 256.2 9M 2014 ■Net interest income 9M 2015 ■Net non-interest income Net non-interest income | nine-month Banking Business | GEL millions +34.1% 200 171.5 180 +112.5% 10.2 160 127.9 140 +59.0% 57.4 120 4.8 100 36.1 +22.7% 14.6 80 11.9 60 +18.9% 40 89.3 75.1 20 0 Holding company of BANK OF GEORGIA 9M 2014 9M 2015 Net fee and commission income. ■Gross insurance profit ■Net banking foreign currency gain Net other banking income BGEO www.bgeo.com GROUP November 2015 GEL millions GEL millions +39.4% +4.1% 250 190.0 182.6 200 136.3 60.8 56.2 150 46.3 100 126.4 129.2 50 90.0 0 Q3 2014 Q2 2015 Q3 2015 ■Net interest income ■Net non-interest income Net non-interest income quarterly Banking Business +31.3% 20 22 +8.1% 70 60.8 56.2 60 5.2 46.3 2.7 50 18.7 1.3 19.8 40 13.4 5.8 3.5 30 3.8 27.8 31.1 30.2 10 0 Q3 2014 Q2 2015 ■Net fee and commission income ■Net banking foreign currency gain Q3 2015 Gross insurance profit Net other banking income page 26#27Banking Business | Keeping Keeping a tight grip on costs Operating expenses | nine-month Banking Business Operating expenses | quarterly Banking Business GEL millions 250 +24.1% 196.7 200 158.5 2.4 25.2 2.3 150 18.9 52.7 42.0 100 50 95.3 0 116.4 9M 2014 Salaries and other employee benefits ■Banking depreciation and amortisation 9M 2015 Administrative expenses Other operating expenses GEL millions +20.9% +1.4% 65.2 66.2 70 54.7 0.9 0.6 60 0.6 8.3 8.5 50 6.4 17.9 17.3 40 14.1 30 20 38.1 39.8 33.6 10 0 Q3 2014 Q2 2015 Q3 2015 ■Salaries and other employee benefits ■Banking depreciation and amortisation ■Administrative expenses Other operating expenses Operating income before cost of credit risk | nine-month Banking Business Operating income before cost of credit risk | quarterly Banking Business GEL millions 400 300 225.6 200 100 -100 -200 0 (51.3) 9M 2014 (126.8) 9M 2015 Cost of credit risk and net non-recurring items Operating income before cost of credit risk Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 353.5 GEL millions 140 120 100 1282848 81.6 80 60 40 20 0 -20 (15.6) -40 -60 Q3 2014 (44.2) Q2 2015 123.9 117.4 Cost of credit risk and net non-recurring itemss ■Operating income before cost of credit risk (39.7) Q3 2015 page 27#28Banking Business | Focus on efficiency Cost / Income ratio | half-year Banking Business 44% Cost Income ratio quarterly Banking Business 44% 42.2% 41.5% 42% 42% 40.1% 39.2% 40% 38% 41.3% 40% 38.5% 36.8% 38% 35.7% 34.8% 36% 36% 34% 35.7% 34% 32% 32% 30% 30% 9M 2014 9M 2015 4Q 2013 1Q 2014 2Q 2014 3Q 2014 4Q 2014 1Q 2015 2Q 2015 3Q 2015 Cost/Income Ratio Revenue and operating expenses | half-year Banking Business Operating Leverage GEL millions 600 500 384.1 400 300 200 100 0 550.2 Revenue and operating expenses | quarterly Banking Business +2.7% q-o-q +19.1% y-0-y Operating Leverage +18.5% y-0-y 196.7 158.5 9M 2014 Revenue ■Operating expenses 9M 2015 Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 GEL millions 200 136.3 150 182.6 190.0 100 65.2 66.2 54.7 50 0 3Q 2014 Revenue ■Operating expenses 2Q 2015 3Q 2015 page 28#29Banking Business | growing income notwithstanding the pressure on yields Loan Yields annual Banking Business Loan Yields | quarterly Banking Business 20% 17.2% 100% 20% 100% 16.2% 80% 60% 40% 74.0% 69.1% 30.9% 20% 26.0% 11 14.3% 14.7% 80% 14.6% 14.7% 15% 14.2% 15% 60% 10% 10% 40% 69.6% 70.0% 70.7% 70.7% 72.8% 5% 5% 29.3% 30.4% 30.0% 29.3% 27.2% 20% 0% 0% 0% 2012 2013 2014 9M 2015 Q3 - 2014 Q2-2015 0% Q3-2015 Net loans, GEL, consolidated Net loans, FC, consolidated Currency-blended loan yield Net loans, FC, consolidated Net loans, GEL, consolidated. Currency-blended loan yield, annualised Loan Yields, GEL | quarterly Banking Business 24% Loan Yields, foreign currency | quarterly Banking Business 22.8% 14% 23% 11.5% 11.4% 11.2% 12% 21.6% 22% 10% 21% 19.8% 20% 8% 6% 4% 19% 2% 18% 0% Q3 2014 Q2 2015 Q3 2015 Q3 2014 Q2 2015 Q3 2015 Loan yield, GEL Loan yield, FC Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 Loan yields excluding provisions page 29#30Banking Business | Stable Cost of Funding Cost of Funds | half-year Banking Business Cost of Funds | quarterly Banking Business 8% 8% 7.1% 7% 7% 5.9% 6% 6% 5.1% 5.0% 5.1% 4.8% 4.7% 5% 5% 4% 4% 3% 3% 2% 2% 1% 1% 0% 0% 2012 2013 2014 9M 2015 Cost of funds, consolidated Q3-2014 Q2-2015 Q3-2015 Cost of funds, consolidated Cost of Customer Funds| annual Banking Business Cost of Customer Funds | quarterly Banking Business 100% 8% 100% 8% 7.1% 90% 7% 7% 80% 80% 5.5% 6% 6% 70% 4.2% 4.3% 5% 4.4% 5% 60% 60% 4.1% 4.1% 4% 50% 4% 40% 69.9% 68.2% 71.2% 73.5% 40% 3% 70.4% 72.0% 73.5% 3% 30% 2% 2% 20% 20% 29.6% 28.0% 26.5% 30.1% 31.8% 28.8% 26.5% 1% 1% 10% 0% 0% 0% 0% 2012 2013 2014 9M 2015 Q3-2014 Q2-2015 Q3 - 2015 Client deposits and notes, FC, consolidated Client deposits and notes, GEL, consolidated Currency-blended cost of client deposits and notes Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 Client deposits, FC, consolidated Client deposits, GEL, consolidated Currency-blended cost of client deposits, annualised page 30#31Banking Business | Excellent capital adequacy position Basel I capital adequacy ratios JSC Bank of Georgia consolidated NBG (Basel 2/3), capital adequacy ratios JSC Bank of Georgia standalone 18% 30% 27.1% 26.1% 26.1% 16% 23.7% 14.2% 25% 23.0% 22.1% 21.2% 14% 11.2% 12% 20% 16.7% 15.9% 15.8% 14.1% 12.9% 11.1% 9.8% 10.4% 10.2% -------------------------------------10.5% 10% 15% 8% 10% 6% 4% 5% 2% 0% 0% 2012 2013 2014 9M 2015 ■Tier I Capital Adequacy Ratio ■Total Capital Adequacy Ratio Q3 2014 Q4 2014 Tier I Capital Adequacy Ratio NBG Tier I CAR min requirement NBG Total CAR min requirement Q1 2015 Q2 2015 Q3 2015 Total Capital Adequacy Ratio Risk Weighted Assets Basel I vs NBG (Basel 2/3) JSC Bank of Georgia consolidated (BIS I), standalone (BIS 2/3) NBG (Basel 2/3)Tier I Capital and Total Capital JSC Bank of Georgia standalone 9,000 8,359 8,351 8,473 GEL '000 30 Sep 2015 Dec 2014 Sep 2014 Jun 2014 Mar 2014 Dec 2013 8,000 7,204 7,172 7,253 Tier I Capital (Core) 860.2 800.5 723.2 669.9 764.2 748.3 6,471 6,707 7,000 6,253 Tier 2 Capital 5,628 6,000 (Supplementary) 482.1 217.1 198.7 197.9 190.1 189.8 5,000 Total Capital 1,342.3 1,017.6 921.9 867.8 954.3 938.1 4,000 3,000 Risk weighted assets 8,473.1 7,204.1 6,470.6 6,202.9 5,901.9 5,733.7 2,000 1,000 0 Q3 2014 Q4 2014 Q1 2015 Tier 1 Capital ratio Total Capital ratio 10.2% 15.8% 11.1% 14.1% 11.2% 10.8% 12.9% 13.1% 14.2% 14.0% 16.2% 16.4% Q2 2015 Q3 2015 ■BIS ■NBG Basel 2/3 Holding company of BANK OF GEORGIA BGEO www.bgeo.com reported to NBG are reported in the appendix November 2015 GROUP page 31#32Contents BGEO Group PLC | Overview Results Discussion | BGEO Group PLC Results Discussion | Banking Business Results Discussion | Segments Georgian Macro Overview Appendices Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 page 32#33GEL millions Client data RB standalone Retail Banking (RB)| No. 1 retail bank in Georgia Portfolio breakdowns RB standalone Volumes are in GEL millions Number of total Retail clients, of which: Number of Solo clients ("Premieum Banking") Consumer loans & other outstanding, volume Consumer loans & other outstanding, number Mortgage loans outstanding, volume 30-Sep-15% of clients 2014 1,959,111 10,328 824.7 0.5% 634,025 32.4% 783.1 1,451,777 7,971 691.8 526,683 600.9 2013 1,245,048 6,810 560.2 455,557 441.4 2012 Pawn loans 2.3% Automobile POS loans loans 1.0% 3.5% 1,054,248 5,413 480.0 406,213 Credit cards and overdrafts 10.9% 388.7 Mortgage loans outstanding, number 12,576 0.6% 11,902 10,212 9,850 Mortgage loans 28.3% Micro & SME loans outstanding, volume 881.9 666.0 497.0 364.4 Micro & SME loans outstanding, number 18,296 0.9% 16,246 13,317 11,136 Loans by products Total: GEL 2.8 bn General Credit cards and overdrafts outstanding, volume 319.1 135.0 142.4 Credit cards and overdrafts outstanding, number 443,591 22.6% 199,543 174,570 146.4 142,072 consumer loans 22.1% Credit cards outstanding, number, of which: American Express cards 729,713 37.2% 116,615 117,913 107,261 102,085 5.2% 110,362 108,608 99,292 Micro- and agro-financing loans and SME loans 32.0% RB loans RB standalone Loans growth: 48.0% growth y-o-y 27.7% growth y-o-y on constant urrency basis RB deposits RB standalone Deposits growth: 49.7% growth y-o-y 20.3% growth y-o-y on constant currency basis 3,000 2,751 2,000 1,806 1,800 2,500 2,067 2,000 1,613 1,348 1,500 1,000 500 1,600 1,350 1,400 1,087 1,200 1,000 817 800 600 400 200 2012 2013 2014 9M 2015 2012 2013 2014 9M 2015 ■Retail net loans Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 ■Retail client deposits Deposits by category Total: GEL 1.8 bn Deposits by currency Total: GEL 1.8 bn Current accounts and demand deposits 38.8% Client deposits, GEL 25.7% Time deposits 61.2% Client deposits, FC 74.3% page 33#343Q15 83,141 19,982 5,202 2,861 111,186 (22,466) Retail Banking (RB) | Strong loan book growth PL | Retail Banking RB Consolidated Income statement Highlights GEL thousands, unless otherwise noted Net banking interest income Net fee and commission income Net banking foreign currency gain Net other banking income Revenue Salaries and other employee benefits Change Change Change 3Q14 2Q15 9M15 9M14 y-o-y q-o-q y-0-y 54,533 52.5% 79,269 4.9% 237,560 155,478 52.8% 15,498 28.9% 18.406 8.6% 56,954 41,509 37.2% 4,310 20.7% 4,305 20.8% 13,412 12,550 6.9% 928 NMF 1,384 106.7% 5,209 2,754 89.1% 75,269 47.7% 103,364 7.6% 313,135 212,291 47.5% (18,087) 24.2% (22,416) 0.2% (68,478) (51,580) 32.8% Administrative expenses (12,081) (9,218) 31.1% (11,632) 3.9% (35,953) (26,321) 36.6% Banking depreciation and amortisation. (6,806) (4,950) 37.5% (6,818) -0.2% (20,455) (14,375) 42.3% Other operating expenses (353) (298) 18.5% (496) -28.8% (1,312) (1,035) 26.8% Operating expenses (41,706) (32,553) 28.1% (41,362) 0.8% (126,198) (93,311) 35.2% Operating income before cost of credit risk 69,480 42,716 62.7% 62,002 12.1% 186,937 118,980 57.1% Cost of credit risk (22,713) (6,587) NMF (20,662) 9.9% (60,035) (6,959) NMF Net non-recurring items (3,128) (284) NMF (2,875) 8.8% (6,451) (5,051) 27.7% Profit before income tax 43,639 35,845 21.7% 38,465 13.5% 120,451 106,970 12.6% Income tax expense Profit (4,747) (5,621) -15.5% (5,900) -19.5% (16,386) (11,878) 38.0% 38,892 30,224 28.7% 32,565 19.4% 104,065 95,092 9.4% Loan Yields | Retail Banking RB standalone Deposit Costs | Retail Banking RB standalone 120% 25% 120% 21.4% 6.1% 19.8% 100% 100% 5.2% 17.4% 17.5% 20% 80% 80% 4.0% 3.8% 15% 41.1% 60% 49.9% 50.5% 60% 52.1% 58.9% 10% 49.5% 47.9% 63.6% 40% 40% 69.4% 67.6% 50.1% 74.3% 5% 20% 20% 36.4% 30.6% 32.4% 25.7% 0% 2012 2013 Net loans, RB, GEL Net loans, RB, FC 0% 0% 2014 9M 2015 2012 2013 2014 9M 2015 Client deposits, RB, FC Currency-blended loan yield, RB Client deposits, RB, GEL Currency-blended cost of client deposits, RB Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 1% 0% do do do do do do do do 7% 5% 4% 3% page 34#35Retail Banking | Strong loan book growth RB Loan Yield | quarterly RB standalone RB Cost of Deposits | quarterly RB standalone 30.0% 5.0% 4.6% 24.7% 23.6% 4.3% 25.0% 4.5% 21.5% 3.9% 4.0% 3.7% 4.0% 3.7% 3.5% 3.6% 3.5% 20.0% 17.2% 17.3% 17.9% 3.5% 3.0% 15.0% 12.1% 11.2% 11.4%. 2.5% 2.0% 10.0% 1.5% 5.0% 1.0% 0.5% 0.0% 0.0% Loan Yield Loan yield, GEL Loan yield, FC Cost of deposits Cost of deposits, GEL Cost of deposits, FC ■3Q14 2015 ■3Q15 ■3Q14 2Q15 ■3Q15 RB NIM | quarterly RB standalone 12.0% 11.0% 10.0% 9.7% 9.5% 9.5% 9.0% 8.0% 7.0% 6.0% 5.0% 3Q14 2Q15 3Q15 NIM Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 page 35#36Corporate Banking (CB) PL | Corporate Banking CB Consolidated Income statement Highlights Change Change Change 3Q15 3Q14 2Q15 9M15 9M14 GEL thousands, unless otherwise noted y-o-y q-0-q y-o-y Net banking interest income 32,126 25,557 25.7% 33.949 -5.4% 101,494 73,044 38.9% Net fee and commission income 8,705 6,197 40.5% 8,316 4.7% 23,022 18,211 26.4% Net banking foreign currency gain 7,272 6,561 10.8% 9,769 -25.6% 24,875 17,572 41.6% Net other banking income 2,288 806 183.9% 1,819 25.8% 5,177 2,498 107.2% Revenue 50,391 39,121 28.8% 53,853 -6.4% 154,568 111,325 38.8% Salaries and other employee benefits (9,392) (8,938) 5.1% (8,853) 6.1% (26,733) (24,634) 8.5% Administrative expenses (3,000) (2,348) 27.8% (3,773) -20.5% (9,280) (8,109) 14.4% Banking depreciation and amortisation (1,065) (958) 11.2% (957) 11.3% (3,012) (2,847) 5.8% Other operating expenses (107) (121) -11.6% (188) -43.1% (507) (692) -26.7% Operating expenses (13,564) (12,365) 9.7% (13,771) -1.5% (39,532) (36,282) 9.0% Operating income before cost of credit risk 36,827 26,756 37.6% 40,082 -8.1% 115,036 75,043 53.3% Cost of credit risk (10,531) (7,659) 37.5% (14,146) -25.6% (44,057) (31,533) 39.7% Net non-recurring items (1,401) (115) NMF (199) NMF (2,199) (2,568) -14.4% Profit before income tax 24,895 18,982 31.2% 25,737 -3.3% 68,780 40,942 68.0% Income tax expense (2,698) (2,840) -5.0% (4,119) -34.5% (10,163) (5,193) 95.7% Profit 22,197 16,142 37.5% 21,618 2.7% 58,617 35,749 64.0% Loan Yields | Corporate Banking, standalone CB standalone Deposit Costs | Corporate Banking, standalone CB standalone 100% 16% 100% 8% 13.9% 7.2% 12.4% 14% 7% 80% 10.6% 10.6% 80% 12% 6% 50.3% 50.9% 51.4% 51.4% 10% 5% 60% 60% 8% 4.6% 4% 2.9% 3.0% 40% 6% 40% 3% 83.6% 83.2% 86.8% 89.0% 4% 49.7% 49.1% 48.6% 48.6% 2% 20% 20% 2% 1% 16.4% 16.8% 13.2% 11.0% 0% 0% 0% 0% 2012 2013 2014 9M 2015 2012 2013 2014 9M 2015 Net loans, CB, GEL Client deposits, CB, FC Net loans, CB, FC Currency-blended loan yield, CB Client deposits, CB, GEL Currency-blended cost of client deposits, CB Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 page 36#37Highlights Corporate Banking (CB) • No.1 corporate bank in Georgia Portfolio breakdowns, 30 September 15 CB standalone Loans by sectors Health and Other 15.4% social work 4.2% Integrated client coverage in key sectors c.5,000 clients served by dedicated relationship bankers Mining and quarrying. 4.6% Financial intermediation 2.8% Construction 5.4% Electricity, gas and water supply 3.3% Loans & Deposits CB standalone GEL millions 2,500 2,253 2,161 2,000 1,819 1,696 1,500 1,221 1,149 1,186 1,000 500 0 2012 Corporate net loans 1,608 2013 2014 9M 2015 Holding company of BANK OF GEORGIA Corporate client deposits BGEO www.bgeo.com GROUP November 2015 Manufacturing 27.1% Trade Transport & Communicatio 16.3% n 5.7% Hospitality 5.1% Real estate 10.1% Time Deposits, 26.9% Deposits by category GEL, 49% FC, 51% Current Account & Demand Deposits, 73.1% Top 10 CB borrowers represent 30% of total CB loan book Top 20 CB borrowers represent 44% of total CB loan book page 37#38Corporate Banking (CB) CB Loan Yield | quarterly CB standalone CB Cost of Deposits | quarterly CB standalone 14.0% 12.9% 13.2% 5.0% 4.4% 4.4% 10.7% 4.5% 12.0% 10.6% 10.3% 10.5% 10.6% 10.4% 10.0% 4.0% 3.6% 10.0% 3.5% 2.8% 3.0% 3.1% 3.0% 8.0% 2.5% 6.0%- 2.0% 2.0% 1.9% 1.7% 4.0% 1.5% 1.0% 2.0% 0.5% 0.0% 0.0% Loan Yield Loan yield, GEL Loan yield, FC Cost of deposits Cost of deposits, GEL Cost of deposits, FC 3Q14 2Q15 ■3Q15 ■3Q14 2015 ■3Q15 CB NIM | quarterly CB standalone 10.0% 9.0% 8.0% 7.0% 6.0% 4.6% 4.5% 4.1% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 3Q14 2Q15 3Q15 Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 page 38#39Investment Management | results overview Highlights • • . Strong presence internationally through representative offices in Israel (since 2008), the UK (2010), Hungary (2012) and Turkey (2013). Successfully placed CDs worth US$8 million, EUR 8 million and GBP 5 million Euroclearable CDs. CDs issued to IM clients stood at GEL527.5 million. Galt & Taggart acted as a Co-Leader Manager for the GBP 218mln IPO of Georgia Healthcare Group on the London Stock Exchange ("GHG LN"). This marks a landmark transaction for G&T in helping Georgian companies raise equity financing from local and international investors AUM* of GEL 1,347.0 million as of September 2015, up 37.4% y-o-y * Wealth Management client deposits, Galt &Taggart client assets, Aldagi Pension Fund and Wealth Management client assets at Bank of Georgia Custody WM funds breakdown Other Client deposits | September 2015 WM client deposits 1,200 1,016.4 1,000 805.3 GEL millions 800 679.4 605.2 600 400 200 0 2012 2013 2014 9M 2015 ■Client Deposits, WM 27% Georgia 48% UK 4% Virgin Islands British 4% Israel 12% Germany 5% Galt & Taggart - Investment Bank ირი m² m IFC International Finance Corporat for Retraction and Decade European Ba EVEX Acquistion of 53.45% share capit JSC POPULI by loli Supermarkal USD 5 000 000 USD 10.000 000 9.0% 1 Year Bonds 8.75% 3 Year Bonda USD 10 000 000 8.42% 1 Year Bonds GEL 30 000 000 6.924 % 2-Year Bonds GEL 25 000 000 Floating Rate 3-Year Note Galt & Taggart - Research DANE OF GEORGIA Wine is Bottled Poetry USD 15 000 000 95% 2-Ther Bands Broke Scle Placement Agent Sole Placement Agent Sole Placement Agent Lead Arranger SALT & TAGGART GALT & TAGGART SALT & TAGGART July 2012 June 2014 April 2014 September 2014 Lead Arranger Se Pacemant Aget GALT & TAGGART SALT & TAGGART GALTA TAGGART GALT & TAGGART February 2011 February 2016 May 2015 • Acted as lead arranger in 1H15 for bond offerings for o US$15 mln bonds issued by Evex 。 GEL 25 mln floating notes issued by EBRD 。 GEL 30 mln bonds issued by IFC o US$20 mln bonds issued by m² Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 Saber he Opportunity gla's Agual secar you need is love... hepping For Real Estate Macro coverage Georgia Azerbaijan Fixed Income Coverage Sector coverage • • Energy . Tourism . Agriculture • Wine • GOGC Commercial Real Estate • Georgian Railway page 39#40GHG Market shares GHG strategy Capacity Revenue In 9M15 17.6% Georgia healthcare market & GHG market share evolvement Hospitals Maintain dominant market share in hospitals by capacity and revenue GEL 1.2bln() Ambulatories GHG Replicating hospital consolidation experience in outpatient segment, with a first mover advantage GEL 0.9bln Pharmaceuticals Redistribution of funds expected from pharmaceuticals to ambulatory services GEL 1.3blno 26.6% Bed market share 2,000 Hospitals, GEL mln 1,500 1,000 Market 674 643 500 CAGR'03-14: 13.7% '14-18: 11% 811 858 941 714 2008 2009 2010 2011 2012 2013 2014 Long-term target 0.5% 33.0% In 9M15 33.0% Long-term target Ambulatories, GEL mln 2,000 1,647 1,489 CAGR'03-14: 17.9% 1,341 1,500 1,203 '14-18: 16% 1,075 2015E 2016F 2017F . • • Growth drivers Low utilisation (50-60%) Fragmented market Low equipment penetration System inefficiency (low nurse-to-doctor ratio) Holding company of BANK OF GEORGIA GHG: accelerated revenue market share growth on the back of well-invested asset base (1) 2015E market value BGEO www.bgeo.com GROUP November 2015 2018F 1,000 500 695 592 473 376 241 272 2008 2009 2010 2011 2012 2013 • Low outpatient encounters Fragmented market New prescription policy 802 2014 2015E GHG: replicating hospital cluster model and consolidation experience in ambulatory sector 1,448 1,250 1,079 930 2016F 2017F 2018F 17.0% 0% 38.0% 25.0% Share in total Healthcare spending Year 2014 medium term target GDP nominal, GEL bln CAGR'03-14: 11.8% 19.1 18.0 '15-20: 9% 20.7 24.3 26.2 26.8 29.2 30.7 33.21 36.2 47.2 43.2 39.6 2008 4.8% 2009 5.1% 2010 5.3% 2011 5.3% 2012 5.5% 2013 6.1% 2014 6.4% 2015E 7.0% 2016F 7.3% 2017F • 7.6% 2018F 7.8% 2019F 2020F Sources: GHG internal reporting: Frost & Sullivan analysis, 2015; NHA, Ministry of Labor, Health and Social Affairs of Georgia; NCDC; OECD, World Health Organisation and World Bank, 2013 data new prescription policy introduced in 2014 ambulatory market consolidation Weakening of existing pharma-duopoly spending on pharma Georgia's 38% vs 16-17% in Europe; decreasing trend in comparable countries page 40 0%#41GHG | Long-term, High-growth Story 2015-2018 Medium-term Target (5-10 Year Horizon) Georgia 2014 or most recent year(1) Georgia medium-term() Spending per capita (US$) 217 (Georgia) Price inflation (heart surgery, US$) $6,500 (GHG) 0 $ 502 9,000 GHG Revenue per bed (US$) 40,000 (GHG) 99k Significant expansion of capacity by 2025 Outpatient Encounters per capita 2.7 (Georgia) 5.4 Nurse to doctor ratio 1:1.6 (Georgia) Pharmaceuticals' share in total healthcare spending 38% (Georgia) OD 4:1 (Georgia, WHO recommendation) 25% Long-term Target (Beyond 10 Year Horizon) EM 2014 or most recent year Substantial room to grow beyond 2025 1,076 (2) $ 25,000 00 280k 8.9 3.4:1 15.4% Bed utilisation for referral hospitals; World Bank; GHG internal reporting; Management Estimates; Ministry of Finance of Georgia; Frost & Sullivan 2015 WHO: Average of countries: Chile, Costa Rica, Czech Republic, Estonia, Croatia, Hungary, Lithuania, Latvia, Poland, Russian Federation, Slovak Republic; BAML Global Hospital Benchmark, August 2014 Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP Sources: (1) November 2015 (2) page 41#42GHG | Maintain dominant market share in hospitals by capacity and revenue Hospital Competition Key takeaways:(1) • GHG is more than four times larger than next largest competitor Highly fragmented with top 5 players having 40% market share and average number of beds per hospital at 45 84% of national bed capacity is privately owned 64% of beds are renovated in Georgia, compared to 86% of GHG's beds that are renovated National bed capacity, % breakdown (¹) Soviet-era legacy 36 % 490 % 64 ■Renovated beds Soviet-era beds 86% of GHG beds are renovated (2) Renovated Key Georgian Hospitals (1) National bed capacity (# of Beds, # of Hospitals) (¹) EVEX Medical Corporation Vienna Insurance Group 449 Gudushauri-Chachava 483 Aversi 225 PSP 216 Other Revenue market share growth drivers: • c.30% market share by capacity to be achieved after renovation of Deka and Sunstone (additional c.500 beds) increasing presence in Tbilisi hospital market (from 24.0% to 30.2% by beds) that has 1.9x higher hospitalization rate vs Georgian average. Continuing to optimise service mix at recently acquired, less efficient hospitals (Avante, Traumatology, Sunstone, Deka, HTMC) by adding higher revenue generating services Holding company of BANK OF GEORGIA BGEO www.bgeo.com Sources: (1) November 2015 (2) GROUP #1 2,670 36|75 27% 15 30 4% 3|161 5% 5145 2% 2|108 2% 6,012 160|37 60% Market share X Number of hospitals X Average number of beds at hospital Market share by number of beds. Source: NCDC, data as of December 2014, updated by company to include changes before 30 June 2015 GHG internal reporting page 42#43Competition GHG ambulatory clinics GHG | Replicating hospital consolidation experience in outpatient segment 40 Key takeaways: Ambulatory Competition • GHG has less than 1% market share in ambulatories, targeting 17% (long-term) • The rest of the market similarly fragmented, with no single player having more than 1% market share and comparable access to capital and management Potential to grow ambulatory revenue from Imedi L - out of GEL c.16mln Imedi L spending on ambulatories (2015E), only 34% is spent at GHG ambulatory clinics due to limited footprint in ambulatory segment Clinic facade Reception/registration WE W ปีง Doctor's office Clinic facade Reception/registration Doctor's office Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 Sources: GHG internal reporting; Frost & Sullivan analysis, 2015, company photos page 43#44Key Segments Key Services Market Size Market Share Selected Operating Data GHG | Segment overview Evex GEORGIA HEALTHCARE GROUP Imedi L Referral and Specialty Hospitals General and specialty hospitals offering outpatient and inpatient services in Tbilisi and major regional cities Community Hospitals Basic outpatient and inpatient services in regional towns and municipalities GEL 1.2bln (2015E) Ambulatory Clinics Outpatient diagnostic and treatment services in Tbilisi and major regional cities GEL 0.9bln (2015E) Medical Insurance Range of private insurance products purchased by individuals and employers GEL 0.14bln (2015E) 17.6% by revenues 26.6% by beds (2,670), which is expected to grow to c.30.0% as a result of renovation of recently acquired hospital facilities (additional c.500 beds); 83% (9M 2015) 16 hospitals 2,209 beds 19 hospitals 8% Financials (9M 2015) EBITDA GEL 39.6mln Revenue GEL 171.4mln* 67% 17% 0.5% 38.1% 7 clinics 270,000 insured 310,000+ outpatients treated 461 beds 2% 2012-9M15 GEL 120.0mln CAGR 68% GEL 13.3mln 2012-9M15 CAGR 14% GEL 3.7mln 2012-9M15 CAGR 8% GEL 40.7mln 10% 3% GEL 31.8mln 80% 2012-9M15 CAGR 71% GEL 3.9mln 2012-9M15 CAGR 30% GEL 1.3mln 2012-9M15 CAGR 37% GEL 2.6mln EBITDA Margin(): 28.6% EBITDA Margin(): 31.0% Holding company of BANK OF GEORGIA EBITDA Margin (1): 27.9% Note: EBITDA margins are based on gross of intercompany eliminations revenue numbers BGEO www.bgeo.com GROUP November 2015 Source: GHG internal reporting (1) EBEBIDADAangangiaseacalculatdaltech dealsed ovengrossos odirectieticamcnebatbates *Eliminations are included in total revenue 23% 7% 2012-9M15 CAGR 15% 2012-9M15 CAGR -7% EBITDA Margin(¹): 6.5%#45m² Real Estate | Leading real estate development company (1/2) Outstanding Track Record ■ Core business activities: the company develops, sells and manages residential apartments 2 Completed Projects Total sales US$56.9mln • Number of apartments: 645 . Total Project Cost: US$48.6mln Land value materialized: US$6.3mln • Total net income: US$7mln Revenue Dynamics (GEL' thousand) Fast Growing Company 13,752 10,478 EBITDA Dynamics (GEL' thousand) 73% 63% 51% 8,616 7,600 2,314 4,574 Total sales US$70.6mln, yet to be recognised as revenue 5 On-going Projects • Number of apartments (under construction): 1843 2012 2013 2014 Total Project Cost: US$130 mln Total expected net income: US$21.5 mln • Land value to be materialized: US$15.9mln Note: m² Affordable Housing Business figures only Project Initiation Value Creation 2012 2013 2014 EBITDA EBITDA Margin 2010-2012 - BoG made a cash investment of GEL 5.0m (US$3m) with an idea to develop problem land plots seized after 2008 into an opportunity Testing the market and potential for value creation 2012-2015- After successful completion of two projects and launch of five ongoing projects, M2 has become a leading real estate company with significant potential for growth Value Creation Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 The Group generates an IRR of more than 30%, leveraging on M2's successful track record of completed projects Source: Company information. Conversion form US$ to GEL was done using current exchange rate as at 31 December 2014. page 45#4650 50 40 40 m² Real Estate | Leading real estate development company (2/2) Total sales of US$127.4mln since 2010 1111111 Project Sales (US$m) 30 20 20 Tamarashvili Street IRR: 46% • Start: May-12 Completion: Jun-14 Apartments sold: 519/522 (99%) Sales: US$47.4 mln Chubinashvili Street IRR: 47% Start: Sep-10; Completion: Aug-12 Apartments sold: 123/123 (100%) Sales: US$9.9 mln 10 10 0 0 Kazbegi Street Nutsubidze Street . IRR: 58% • Start: Dec-13 • IRR: 165% • Start: Dec-13 Completion: Dec-15 • Apartments sold: 262/295 (89%) . (89%) Sales: US$23.9mln • Sales: US$15.7 mln Completion: Sep-15 Apartments sold: 196/221 Tamarashvili Street II IRR: 71% Start: Jul-14 Completion: Apr-16 Apartments sold: 177/270 (66%) • Sales: US$16.4 mln 1 2 3 Projects Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 • • Tamarashvili Street III IRR: 31% Start: Jul-15 Completion: Sep-18 Apartments sold: 135/819 (16%) Sales: US$9 mln Significant potential of the project from sales of US$29,000 price apartments with current IRR of c. 31% Moscow Avenue IRR: 31% Start: Sep-14 Completion: Mar-16 Apartments sold: 126/238 (53%) Sales: US$5.1 mln 5 *As per the revenue recognition policy adopted by the company in line with IFRS, revenue is recognised at the full completion of the project instead of in line with percentage construction completion 7 page 46#47Acquisition of a minority interest in GGU | an Attractive Investment Opportunity Exit strategy through potential IPO is feasible Strong potential for value generation for shareholders in short term Strong management and streamlined operations but room for potential further improvement exists Transaction Rationale A profitable company with significant capacity for growth Attractive Investment Opportunity A natural monopoly . • Cash generating business, no additional financing required for planned capex Potential to improve utilisation Transaction Overview • Company Overview Georgian Global Utilities Ltd. (“GGU") is a privately owned company that supplies water and provides wastewater services to 1.4 million people (approximately 1/3 of Georgia's total population) in Tbilisi, Mtskheta and Rustavi and operates hydropower electricity generation facilities Sales to corporates represented c.70% of water revenue GGU owns and operates 3 hydropower generation facilities with a total capacity of 143MW Most of the milestones committed to the authorities during the privatization have already been achieved with one project remaining before 2018 No additional equity financing is required for planned Capex program Selected Financials • Transaction to be structured in several steps Revenue Dynamics(4) (GEL'm) 125.3 106.1 108.7 116.0 98.7 Acquisition of 25% shareholding for GEL48.7m (US$26m) Attractive valuation with GGU valued at EV/EBITDA 2014E deal multiple of 4.7x, while industry peers are trading at 8.5x average EV/EBITDA 2014E multiple(3) BOGH provided a US$25mn loan to GGU with proceeds to be paid as dividend to the selling shareholders . The transaction was earnings accretive • Commercial terms have been agreed, transaction will be subject to certain conditions 2010 EBITDA Dynamics (4) (GEL'm) 2011 2012 2013 2014 56.8% 52.5% H 56.1 44.3% 48.2% 41.2% 55.7 48.2 55.9 51.6 2010 2011 2012 2013 2014 Holding company of BANK OF GEORGIA BGEO www.bgeo.com (1) Source: Company information. Conversion form USS to GEL was done using current exchange rate as at 27 November, 2014 for the consideration amounts. Net of accrued interest and dividends for the second tranche. (2) Market Capitalisation as of 1 December 2014. November 2015 (3) GROUP (4) Universe of comparable companies includes Pennon Group. Acea, Artesian Resources, American State Water Company, Athens Water and Thessaloniki Water Supply. Group companies' unconsolidated IFRS financial statements. page 47#48Contents Bank of Georgia Holdings PLC | Overview Results Discussion | Bank of Georgia Holdings PLC Results Discussion | Banking Business Results Discussion | Segments Georgian Macro Overview Appendices Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 page 48#49Georgia at a glance • • General Facts Area: 69,700 sq km Population (2012): 4.5 mln Life expectancy: 77 years Official language: Georgian Literacy: 100% Capital: Tbilisi Currency (code): Lari (GEL) Economy Real GDP growth rate 2011-1H15: 7.2%, 6.2%, 3.3%, 4.8%, 2.8% • Nominal GDP (Geostat) 2014: GEL 29.2 bn (US$16.5 bn) • Real GDP average 10 yr growth rate: 5.8% GDP per capita 2014E (PPP) per IMF: US$ 9,209 Annual inflation (e-o-p) 2014: 2.0% • External public debt to GDP 2014: 26.8% Sovereign ratings: S&P BB-/B/Stable, affirmed in May 2015 Moody's Ba3/NP/Positive, affirmed in March 2015 Fitch BB-/B/Stable, affirmed in October 2015 Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 Herdam Hamburg Penza POLAND BELARUS Orel Frankfurt Leipzig Dusseldorf GERMANY CZECH REP. UKRAINE SLOVAKIA Munich LEORENSTEN AUSTRIA MOLDOVA KAZA WICZERLAND HUNGARY Astro SLOVENIA Elista Milan Turin ROMANIA BOSNIA Genoa CROATIA HERZEG Majkop MONACO Florence SAN MARINO YUGOSLAVIA CAN TAUANIA BULGARIA Black Sea Ed Nalak Grozny Naple ICALY MACEDONIA Salon Machat GEORGIA ARMENIA AZERBAUA TURKEY AZER Polaro GEORGIA page 49#50Liberal economic policy Regional logistics and tourism hub Strong FDI Georgia's key economic drivers Support from international community Electricity transit hub potential Political environment stabilised Holding company of BANK OF GEORGIA Outstanding progress in governance and business reforms, eliminating corruption, strengthening public finances, and streamlining tax and customs procedures. These economic and structural improvements have been institutionalized. Liberty Act (effective January 2014) ensures a credible fiscal and monetary framework: - Public expenditure/GDP capped at 30%; Fiscal deficit/GDP capped at 3%; Public debt/GDP capped at 60% Productivity gains accounted for 66% of the average 5.6% growth over 1999-2012, according to the World Bank Business friendly environment and low tax regime (attested by favourable international rankings) A natural transport and logistics hub, connecting land-locked energy rich countries in the east and European markets in the west, and a market of 900mn customers without customs duties. Free trade agreements with EU, CIS and Turkey and GSP with USA, Canada, Japan, Norway and Switzerland Tourism revenues at US$1,787mln in 2014 (up 3.9% y-o-y); 5.5mln visitors in 2014 (up 2% y-o-y); 5.0mln visitors in 10M15 (up 6.8% y-o-y) Regional energy transit corridor accounting for 1.6% of the world's oil and gas transit volumes An influx of foreign investors on the back of the economic reforms have boosted productivity and accelerated growth. FDI diversified across sectors (2014: US$1,758mln 2013: US$942mln, 2012: US$912mln, 2011: US$1,117mln); FDI averaged 10% of GDP in 2005-2014 FDI up 4.8% y-o-y in 1H15 to US$530.0mln Net remittances of US$1,262.6mln in 2014, 19.5% CAGR 04-14, US$802.9mln in 9M15 Georgia and the EU signed an Association Agreement in June 2014. The deal includes a DCFTA, which is the major vehicle for Georgia's economic integration with the EU, a common customs zone of c.500mn customers and a US$ 18.5tn economy, spurring exports and enhancing the diversification and competitiveness of Georgian products Discussions commenced with the USA to drive inward investments and exports Strong political support from NATO, EU, US, UN and member of WTO since 2000; Substantial support from DFIs, the US and EU Developed, stable and competitively priced energy sector Only 20% of hydropower capacity utilized; 88 hydropower plants are in various stages of construction or development Georgia became a net electricity exporter in 2007-2011 (a net importer in 2012-2014 due to low precipitation and increased domestic demand) Georgia imports natural gas mainly from Azerbaijan Significantly boosted transmission capacity in recent years, a new 400 kV line to Turkey built, other transmission lines to Armenia and Russia upgraded Additional 5,000 MW transmission capacity development in the pipeline, facilitating cross-border electricity trade and energy swaps to Eastern Europe Maintaining healthy economic growth is a priority (potential to grow at an annual average 5% over the next decade) Georgia underscored its commitment to European values by securing a democratic transfer of political power in successive parliamentary, presidential, and local elections and by signing an Association Agreement and free trade agreement with the EU New constitution amendments passed in 2013 to enhance governing responsibility of Parliament and reduce the powers of the Presidency Continued economic relationship with Russia, although economic dependence is relatively low Russia began issuing visas to Georgians in March 2009; Georgia abolished visa requirements for Russians Direct flights between the two countries resumed in January 2010 - Member of WTO since 2000, allowed Russia's access to WTO; In 2013 trade restored with Russia - In 9M15, Russia and Ukraine together accounted for 9.2% of Georgia's exports and 13.3% of imports; just 4.1% of cumulative FDI over 2004-2014 BGEO www.bgeo.com GROUP November 2015 page 50#51Growth oriented reforms Ease of Doing Business | 2016 (WB-IFC Doing Business Report) Economic Freedom Index | 2015 (Heritage Foundation) UK 6 USA 7 Sweden 8 Norway 9 Estonia 16 GEORGIA Armenia Czech Rep. Romania Kazakhstan Montenegro Turkey Serbia Azerbaijan Ukraine USA 12 Estonia UK 8 13 GEORGIA 22 22 Hungary 24 24 35 36 37 Latvia Romania Bulgaria France 41 46 Turkey Italy 55 59 Azerbaijan 63 Russia 83 Ukraine Global Corruption Barometer | TI 2013 % admitting having paid a bribe last year 54 54 37 57 55 73 70 80 85 143 162 Business Bribery Risk, 2014 | Trace International Denmark Norway 1% 3% GEORGIA 4% UK 5% Estonia 6% US 7% Romania Bulgaria Czech Republic 7% 8% 15% Armenia Latvia Turkey Greece 18% 19% 21% 22% Serbia Lithuania Kazakhstan Ukraine 26% 26% Montenegro Romania Armenia 32% Russia 37% Azerbaijan Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 Sources: Transparency International, Heritage Foundation, World Bank Germany USA 9 10 Georgia 11 Norway 12 Netherlands 13 UK 19 Estonia 22 Poland 31 Czech Rep. 52 Serbia 67 Turkey 70 73 83 87 134 140 page 51#52Diversified resilient economy Gross domestic product Nominal GDP structure, FY 2014 20 12.6% 1H15 GDP growth of 2.8% 14% 12% Hotels & restaurants 2.3% Trade 17.4% 11.1% 15 9.4% 15.8 16.5 16.1 10% Financial interm. 3.3% Other 9.6% 6.2% 14.4 11.2% 8% 12.8 10 6.4% 11.6 4.8% 5.9% 10.2 10.8 7.2% 6% Manufacturing 17.1% Healthcare 5.7% 7.8 2.6% 4% 5 6.4 5.1 3.3% 2% 4.0 Real Estate 6.0% 0 0% -3.7% -2% -5 -4% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014E Nominal GDP (US$bn) Real GDP growth, y/y (%) Construction 7.3% Agriculture 9.2%. Public administr. 9.9% Transport & commun. 10.5% Source: Geostat ▶ Comparative real GDP growth rates, % (2004-2014) 7% 6% 5% 4% 3% 2.2% 2% 1% 0% 3.0% 5.8% 5.1% 5.1% 3.8% 3.8% 4.0% 4.2% 4.4% 3.5% Russia Poland Ukraine Czech Republic Sources: IMF, Geostat Estonia Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 Latvia Romania Lithuania Turkey Moldova Georgia Source: Geostat ▶ GDP per capita 10,000 9,566 9,209 9,000 8,526 8,006 8,000 7,287 7,000 6,135 6,571 5,788 6.030 6,000 4,943 5,000 4,329 4,434 4,000 3,431 3,779 4,131 3,711 3,159 4,267 3,720 3,000 2,479 2,951 2,000 924 1,202 1,522 1,863 2,694 1,000 ■Nominal GDP per capita, US$ ■GDP per capita, PPP Sources: IMF 2014 2015F page 52#536% 5% 4% 3% 2% 1% 0% -1% -2% -3% Georgia TFP growth 3.65%. Productivity gains have been the main engine of growth since 2004 Overall contributions of capital, labour, and Total Factor Productivity (TFP) to growth, 1999-2012 Contributions of capital, labour, and TFP to growth during periods Source: Georgia Rising (2013), WB 10% Capital stock 1.60% 8% 6% 6.32% 3.86% 4% 3.65% 2% 2.25% 1.48% 1.56% 0% 0.67% -2.02% -2% Labor force 0.32% -4% 1999-2003 2004-2007 2008-2009 2010-2012 ■Capital stock ■Labor force ■TFP growth Real GDP growth projection, 2016-2017 Employed persons in business sector, '000 Sources: IMF, WEO October 2015 580 2016F ■2017F 570 560 550 540 530 520 510 Kyrgyz Rep. Kazakhstan Latvia Slovak Rep. Romania Macedonia Lithuania Moldova Estonia Azerbaijan Armenia Czech Rep. Bulgaria Russia Belarus 500 490 480 Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 Source: GeoStat 1Q14 2Q14 Source: Georgia Rising (2013), WB 3Q14 4Q14 1Q15 2Q15 page 53#541,600 1,400 1,200 1,000 800 600 400 200 0 Source: GeoStat Note: services include construction Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 ■Services ■ Agriculture ■Industry Sources: GeoStat 1,900 1,800 1,700 1,600 1,500 1,400 1,300 1,200 1,100 1,000 Employment (thousands) Unemployment rate Further job creation is achievable Georgia's unemployment rate down 2.2ppts y/y to 12.4% in 2014 Average monthly wages and income per household 2009 2010 2011 2012 2013 2014 18% 16% 400 14% 12% 300 10% 8% 200 6% 4% 100 2% 0% 0 2004 500 ▶ Agriculture remains the largest employer, although the share of services in total employment has increased 2,000 1,800 Hired workers account for about 39.7% in total employment 800 700 600 500 400 300 200 100 0 2005 Wages, US$ Total income, US$ Sources: GeoStat 2006 2007 2008 2009 2010 2011 2012 2013 2014 Public sector ■Non-public sector Sources: GeoStat page 54 2006 2007 2008 2009 2010 2011 2012 2013 2014#55Demonstrated fiscal discipline and low public debt Fiscal deficit as % of GDP Breakdown of public debt 0% -0.3% -2% -2.6% -3.4% -4% -4.8% -6% -8% Fiscal deficit/GDP capped at 3% -6.5% -6.7% -2.8% -2.6% -3.0% -3.6% -3.0% -10% 2004 2005 2006 2007 2008 -9.2% 2009 2010 2011 2012 2013 2014E 2015F Fiscal Deficit as % of Nominal GDP Source: Ministry of Finance of Georgia Public debt as % of GDP Multilateral 53% Domestic 22% External 78% Source: Ministry of Finance of Georgia, as of end of 2014 Bilateral 13% Eurobond 9% Government external debt service External public debt portfolio weighted average interest rate 1.9% (Contractual maturity 23 years) US$ mln 70% 63% 60% Public debt/GDP capped at 60% 7.4% 500 8.0% 6.7% 450 6.2% 6.1% 7.0% 400 324.1 51% 304.9 6.0% 288.6 350 311.6 50% 45% 42% 40% 41% 5.0% 300 37% 36% 228.5 35% 36% 40% 35% 32% 250 200.9 4.0% 31% 34% 32% 30% 27% 26% 29% 28% 27% 27% 200 3.0% 21% 24% 150 2.0% 20% 17% 100 1.0% 50 10% 0 0.0% 0% 2015 2016 2017 2018 2019 2020 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014E Multilateral Bilateral Eurobond 2021 Total public debt as % of GDP External public debt as % of GDP Sources: Ministry of Finance of Georgia, Geostat Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 External debt service as % of budget revenues Note: Debt service payments provided based on stock as of June 2015, budget ratios based on 2016 initial budget draft Source: Ministry of Finance of Georgia page 55#56B6A2086420 20 18 16 14 12 10 Turkey Armenia 2013 ■2014F ■2015F Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 2010 Total Budget Receipts, GEL mn Expenditures (Capital + Current), GEL mn Expenditures (capital + current) as % of GDP Source: Ministry of Finance Government social expenditure as % of GDP Georgia Latvia Estonia Belarus Romania Albania Serbia Lithuania Hungary Russia Macedonia Bos and Herz Bulgaria Poland Croatia Investing in infrastructure and spending low on social Revenues and expenditures Current and capital expenditure 12,000 10,000 70% --Current Expenditures -Capital Expenditures 100% 60% 50% 80% 8,000 82.3% 83.6% 82.2% 77.9% 78.1% 40% 75.0% 76.0% 60% 6,000 37.2% 30% 33.9% 4,000 30.7% 30.6% 29.3% 30.2% 29.8% 40% 20% 25.0% 22.1% 24.0% 21.9% 17.7% 16.4% 17.8% 2,000 10% 20% 0 2009 0% 2011 2012 2013 2014 2015F 0% 7 9836543210 Croatia Romania Turkey ■2013 ■2014F ■2015F Source: IMF Latvia Lithuania Serbia Poland Macedonia Russia Estonia Armenia Belarus page 56 2009 Sources: Ministry of Finance 2010 2011 2012 Government capital expenditure as % of GDP Albania Hungary Bulgaria Georgia Bos and Herz 2013 2014 2015F#57Diversified foreign trade Import of goods and services Export of goods and services 12,000 8,000 7,175 7,038 10,000 10,016 7,000 9,133 9,259 1,725 6,000 6,021 1,091 883 8,000 7,988 7,471 1,447 1,562 5,242 914 1,265 5,000 5,879 1,246 688 6,114 4,034 6,000 2.984 3,043 5,248 4,000 3,658 935 1,093 3,163 4.376 282 3,183 455 2.562 978 3,000 2,500 2,019 4,000 3,267 733 217 229 2,000 1,825 399 1,426 2,472 636 6.224 6,723 7.685 7,697 8,290 2,152 1,271 1,641 1,626 2,000 1,252 107 197 1.107 1.329 486 1,986 4.944 5,021 738 913 3,643 4,270 571 2,631 1,000 484 740 996 1,307 1.390 1,839 2,106 1,625 1,938 2,535 2.545 3,100 3,112 0 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2003 2012 2013 2014 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 ■Goods imports, US$ mn ■Georgia originated exports, US$ mn ■Services imports, US$ mn ■Serveces exports, US$ mn ■Re-exports, US$ mn Source: NBG - BOP statistics Imports, 9M15 UAE 3% Japan 3% USA 3% Ukraine 6% Azerbaijan 7% Russia 7% Exports, 9M15 Source:, NBG-BOP statistics Oil imports 9M15 imports US$504.2mln, down 27.5% y-o-y Canada 3% 1,200 100% Other 13% EU .33% Other 17% EU 29% 951 954 1,000 911 918 80% 762 Uzbekistan 4% 60% 800 697 556 555 40% 600 443 20% USA 5% 336 400 0% 186 200 105 -20% China 5%. 0 -40% Azerbaijan 12% 2003 2011 2012 2013 2014 Turkey 17% Russia 7% China 8% Turkey 9% Armenia 9% Oil imports, US$ mn Oil imports, % change, y/y Sources: GeoStat Sources: Geostat, Galt & Taggart Research Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 page 57#58Net remittances Diversified sources of capital inflow FDI inflows US$ mln 2,500 Number of tourists US$530.0 mln in 9M15, up 4.8% 5.0mln visitors in 10M15, up 6.8% 25% 6,000 2,015 2,000 15.3% 19.8% 1,564 1,500 12.2% 9.7% 1,190 8.5% 1,000 7.0% 499 500 340 450 1,787 20% 5,000 5.392 5,493 4,428 4,000 15% 1,117 10.8% 2,820 911 942 3,000 814 658 7.7% 10% 2,032 7.0% 6.1% 5.8% 5.8% 2,000 1,500 1,290 1,426 1,494 5% 1,052 1,155 763 1,000 313 368 0 17 29 560 73 741 460 146 208 243 294 0% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 0 2013 2014E 2003 FDI inflows FDI as % of GDP Sources: Geostat 2004 2005 2006 2007 2008 2009 2010 2011 ■Foreign visitors (thousands persons) ■Net tourist revenue (mln USD) Sources: Georgian National Tourism Agency, National Bank of Georgia 2012 2013 2014E US$802.9 mln in 9M15, down 26.8% US$ bln 600 1,400 8.2% 8.1% 8.2% 7.4% 7.7% 9% 7.6% 500 7.2% 7.1% 8% 1,200 1.322 1,226 1.263 7% 400 1,000 5.4% 1.168 4.9% 6% 800 4.2% 918 949 5% 300 600 755 767 4% 200 3% 400 420 2% 100 200 213 1% 0 0% 0 2009 2010 2011 2012 2013 2014 2004 2005 2006 2007 2008 Net remittances Net remittances as % of GDP Source: National Bank of Georgia Holding company of BANK OF GEORGIA BGEO www.bgeo.com November 2015 GROUP 2003 2004 2005 Public donor funding US$ mln 2006 124 121 148 182 382 92 259 302 57 252 89 79 94 ■Investment projects, credits, US$ mn ■Investment projects, grants, US$ mn 2007 2008 2009 2010 2011 2012 2013 56 144 87 273 287 383 2014 2015F page 58#59Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 20% 15% 10% 5% 0% -5% -10% -15% -20% -25% net FDI to GDP Sources: Geostat, NBG CA deficit to GDP 2007 Currency devaluation by countries* *from 1 January 2014 to 9 November 2015 Source: Bloomberg, http://www.tradingeconomics.com/country-list/inflation-rate Current account deficit supported by FDI Current account deficit and FDI FDI and capital goods import 2008 2009 2010 2011 2012 2013 2014 30% Georgia Turkey Moldova USD/GEL USD/TRY 70% 60% 49.2% 49.8% 45.9% 50% 40% 34.8% 27.3% 29.3% 30% 25.2% 16.2% 20% 10% 0% Armenia USD/AMD Azerbaijan USD/AZN 63.8% 50% ■End-2014 45% 25% 40% 35% 20% 30% 25% 15% 20% 10% 15% 10% 5% 5% 0% 0% Belarus Russia Kazakhstan Ukraine USD/MDL USD/BYR USD/RUB USD/KZT USD/UAH LHS: Devaluation RHS: Inflation Azerbaijan Georgia Source: Central banks Turkey 20% 18% 17.2% 15.1% 16% 14% 12.2% 12% 10.6% 9.6% 10% 8.4% 7.1% 7.0% 7.3% 7.8% 6.7% 8% 6.1% 6% 6.7% 6.9% 6.5% 6.2% 4% 5.3% 5.0% 5.4% 5.8% 6.9% 5.9% 3.9% 2% 3.7% 0% FDI to GDP, % Capital goods imports to GDP, % Sources: Geostat, NBG Monetary policy rates Armenia Russia Kazakhstan Moldova page 59 Latest-2015 Ukraine Belarus#60Sources: NBG FX reserves Floating exchange rate policy and stronger market fundamentals US$bn US$ 2.4 bln reserves as of October 2015 NBG was a net seller of US$247 mln in 10M15 135 130 3.5 1.4 1.4 1.6. 125 3.0 1.3 1.3 1.3 1.4 120 2.5 1.3 1.1 1.2 1.2 2.8 2.9 1.2 2.8 2.7 2.0 1.0 1.0 0.9 2.3 2.1 0.8 1.5 1.0 1.4 1.5 0.6 100 0.4 0.5 0.9 0.2 0.4 0.5 0.2 ་ྲ ༅ ་ྲ ༅ ྣ 115 110 105 95 90 0.0 0.0 85 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 FX reserves M2 multiplier M2 and annual inflation 70% 50% 30% 10% -10% -30% wtariy Jan-03 May-03 Sep-03 Jan-04 May-04 Sep-04 Jan-05 May-05 M2, % change, y/y (LHS) Annual inflation, eop (RHS) Source: NBG Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 Sep-05 Jan-06 May-06 Sep-06 Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 16% 70% 14% 50% 12% 10% 30% 8% 6% 10% 4% 2% -10% 0% -30% -2% -4% -50% -6% -70% Jan-03 Jan-03 Sep-03 May-04 Feb-05 Oct-05 Sources: NBG M2 and USD/GEL M2 % change, y/y (LHS) USD/GEL % change, y/y (RHS) Source: NBG Jul-06 REER Mar-07 Dec-07 Aug-08 May-09 Jan-10 Sep-10 Jun-11 Feb-12 Nov-12 Jul-13 Apr-14 Dec-14 Sep-15 May-03 Sep-03 Jan-04 May-04 Sep-04 Jan-05 May-05 Sep-05 Jan-06 May-06 Sep-06 Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 Jan-12 May-12 Sep-12 Jan-13 35% Lari deppriciation 25% 15% 5% -5% -15% Lari appreciation -25% May-13 Sep-13 page 60 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 -35%#61GROUP ■Loans ■Deposits Banking sector assets, loans and deposits GEL bln 25 Growing and well capitalised banking sector Summary Prudent regulation ensuring financial stability Sector total capital ratio (NBG standards) -17% in 2013 High level of liquidity requirements from NBG at 30% of liabilities, resulting in banking sector liquid assets to client deposits of 53% as of 31 Dec 2014 Resilient banking sector Demonstrated strong resilience towards both domestic and external shocks without single bank going bankrupt No nationalization of the banks and no government ownership since 1994 Very low leverage with retail loans 18.0% of GDP and total loans at 39.1% of GDP as at 31 December 2013 resulting in low number of defaults during the global crisis Source: National Bank of Georgia, Geostat 28.2% CAGR 25% 20.6 20 20 17.3 20% 14.4 15 12.7 13.0 15% 11.6 10.6 105.7 8.9 10 8.3 7.2 6.0 6.3.5 5.2 7.76.7 8.7.6 10% 4.2 4.6 5 1.8.8.7 1.8.9.0 2.3 2.3.1 3.2 3.6 4.0 5% 0% 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Assets Holding company of BANK OF GEORGIA BGEO www.bgeo.com Source: National Bank of Georgia November 2015 Turkey Georgia Austria Belgium Source: WB, IMF Belarus Delaids Denmark Slovakia Latvia Czech Rep. NPLs, 2014 Armenia Russia Kosovo Malta Lithuania Macedonia Moldova Slovenia вшалок Ukraine Bos. & Herz. Croatia Hungary Kazakhstan Romania page 61#62Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 External corporate indebtdness to GDP Corporate loans to GDP Underpenetrated retail banking sector provides room for further growth Corporate loans to GDP Retail loans to GDP 2013 40% 40% 35% 35% 30% 30% 25% 15% 15% 14% 25% 20% 6% 6% 8% 10% 10% 20% 6% 15% 15% 6% 10% 9% 8% 5% 10% 13% 17% 17% 17% 17% 18% 18% 20% 22% 10% 21% 18% 13% 6% 7% 5% 9% 11% 11% 13% 14% 0% 3% 3% 4% 6% 0% 2014 Banking Sector loans and deposits YE 2013 Georgia* Moldova 39.1% ■Gross loans/GDP 36.1% 43.5% ■Deposits/GDP 53.5% Romania 44.3% 57.8% 48.8% Lithuania 40.1% Russia 53.4% 39.1% 55.6% Turkey 53.8% Ukraine 63.8% 46.9% 68.1% Bulgaria 67.3% Serbia 74.9% 56.3% Latvia 78.2% 45.9% 78.8% Estonia 74.5% Source: NBG, Central Banks page 62 2003 2004 ■Retail loans to GDP 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014#63140% 120% 100% 80% 60% 34% 40% 20% 0% Turkey Sources: IMF, Ministry of Finance Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 Sources: IMF %0 Republic Czech Romania 20% 18% 16% 14% 11% 11% 12% 12% 12% 9% 10% 9% 7% 8% 8% 6% 4% 2% Russia Government debt / GDP, YE 2014 Georgia Belarus Macedonia Romania Lithuania Armenia Czech Rep. Denmark Bos. & Herz. Switzerland Slovakia Finland Croatia Ukraine Montenegro Netherlands Germany Slovenia Hungary Austria Canada UK Belgium USA Italy Poland Ukraine One of the highest level of capital and low debt level compared to other frontier markets Bank Capital to Assets, YE 2014 Dollarisation -50 -100 -150 Jan-14 Feb-14 -80 0 Turkey Bulgaria Kazakhstan 200 150 100 550 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 ■NBG monthly net interventions US$ mn -120 250 220 I-AON Georgia 80% 18% 75% 70% 65% 55% 60% Jan-11 May-11 Sep-11 Jan-12 May-12 Deposit dollarization Loan dollarization Sources: National bank of Georgia NBG FX interventions Dec-1 Jan-15 Feb-15 Mar-1 40 40 40 40 May-15 Jun-15 120 US$ sale US$ purchase Jul-15 Aug-15 Sep-15 Oct-15 page 63 27 20 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 55% 60% 80% 75% 70% 65%#64Contents Bank of Georgia Holdings PLC | Overview Results Discussion | Bank of Georgia Holdings PLC Results Discussion | Banking Business Results Discussion | Segments Georgian Macro Overview Developments in 2015 Appendices Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 page 64#65-4% Jan-11 45% Weakening against US$ 40% 35% 30% 25% 20% 15% 11% 11% 10% 5% 1% 0% Armenia Russia Euro Georiga Moldova Source: Bloomberg Note: 9 November 2014 - 9 November 2015 16% 14% Annual inflation 12% 10% سمك 8% 6% 4% 2% 0% -2% May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Core (non-food, non-energy) Headline Inflation Source: GeoStat, NBG Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 Turkey Azerbaijan Ukraine Belarus Kazakhstan Global, regional and local factors fully affected lari in 9M15 Stronger dollar, regional economic problems and domestic expectations fed into GEL moves... ...and Georgia used less reserves to support GEL compared to peers GEL remained competitive.... 0% Inflation remained low in Georgia, compared to trading partners... ...helped by lower world commodity prices... Sep-14 Jan-15 May-15 Sep-15 Georgia Turkey 60% 41% Reserve loss, % 50% 33% 55.6% 115 REER, Jan 2013-100 NEER, Jan 2013-100 110 31% 40% 34.0% 34.6% 25% 23% 105 21% 22% 27.3% 30% 20.8% 21.3% 100 20% 9.0% 9.6% 10% 55 95 Lari' real depreciation Jan-11 Apr-11 Jul-11 Nov-11 Feb-12 May-12 Sep-12 Dec-12 Mar-13 Jul-13 Ukraine Russia Belarus Moldova Armenia Source: IMF Note: Sep-2014 to Sep-2015; Armenia's reserves exclude a US$ 500mn Eurobond issued in March 2015 Source: NBG Azerbaijan 225 World commodity prices 30% 200 ■ End-2014 25% 175 Annual inflation 8.0% 20% 150 15% 125 5.8% 10% 100 5% 75 0% Source: IMF Total Non-energy Energy Note: Commodity price indices, 2005=100 Oct-13 Jan-14 May-14 Aug-14 Nov-14 Mar-15 Jun-15 Oct-15 90 90 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 ...and elevated commodity prices in peers ■Latest-2015 46% Armenia Azerbaijan Georgia Turkey Kazakhstan Belarus Moldova Russia Ukraine Source: National statistics offices Note: Latest Oct 2015, as of September for Azerbaijan, Moldova, & Belarus page 65 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15#66Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 Source: NBG 5% 0% Azerbaijan 10% Georgia 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 -13 May-13 Gross International Reserves, US$ bn Net Foreign Assets, US$ bn 15% Turkey Source: Central banks Note: Latest data as of 9 November 2015 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sen-14 Sep-14 FX Reserves Foreign reserves at adequate level Reserves sufficient to finance more than 3 months of merchandise and services imports NBG intervened moderately at the beginning of 2015 Monetary policy rates 25% ■ End-2014 ■Latest-2015 20% Armenia Nov-14 15 Jan-15 Mar-15 May-15 Jul-15 Sep-15 250 220 3.5 200 3.0 150 2.5 100 2.0 50 1.5 0 1.0 -50 0.5 -100 0.0 -80 -150 Policy rate lower in Georgia vs peers 30% Russia Kazakhstan Moldova Ukraine Belarus page 66 Jan-14 Feb-14 Mar-14 Apr-14 May-14 May-14 Jun-14 +1-mc +I-unc ■NBG monthly net interventions US$... Source: NBG Aug-14 1-any Sen-14 Sep-14 Oct-14 +1-120 Nov-14 120 40 40 40 40 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 Apr-15 May-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 US$ sale 27 20 US$ purchase Oct-15#67Source: NBG BOP pressure on lari eased in 2Q15 BOP: 1Q15 vs 1Q14, trade deficit widened, reserves down BOP: 2Q15 vs 2Q14, trade deficit narrowed, reserves up As % of 1Q15 GDP As % of 2015 GDP Trade deficit (goods) Tourism, net Current transfers, net +14.4% 29.4% Trade deficit (goods) -7.0% 29.1% -4.0% 7.3% -3.8% 10.4% Tourism, net Current transfers, net +5.6% 11.1% +15.4% CA deficit +29.1% 12.4% 13.8% CA deficit -16.2% -53.1% FDI, net 10.4% 3.6% +121.1% FDI, net Other investments, net 9.2% Other investments, net Reserves decrease US$ mn -1,500 -1,000 -500 0 500 ■1Q15 ■1Q14 increase Reserves -1,500 -1,000 -500 0 500 ■2Q15 ■ 2Q14 US$/GEL exchange rate Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Sep-13 Oct-13 80% 2.7 2.5 1Q15 BOP pressure Aug-Sep deposit dollarization 75% 70% 2.3 65% 2.1 2Q15 BOP Dec-Jan deposit 1.9 dollarization pressure eased 60% 1.7 55% 1.5 Source: NBG Nov-13 Dec-13 Jan-14 Feb-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Dec-14 Jan-15 Feb-15 15 Mar-15 Apr-15 May-15 Jun-15 Aug-15 Sep-15 Oct-15 Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 Jan-11 May-11 Source: NBG Deposit dollarization increased further in August-Septmber Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Source: NBG Deposit dollarization Jan-15 May-15 Loan dollarization Sep-15 page 67 80% 75% 70% 65% 60% 55%#6840% Current account balance, as % of GDP 30% Tourism revenues on the rise 20% 10% 0% -10% -20% Strong FDI pattern drives trade deficit; Services and remittances compensating c.70% -30% Trade Deficit -40% 2003 2004 2005 2006 2007 2008 Goods, net Transfers, net Source: GeoStat, NBG, G&T Research Trade deficit down on the back of lower consumer goods imports 30% 20% 10% 10% 0% -10% -20% -30% -40% Jan-14 Mar-14 29% 20% 6% 8% 13% 2% 2% May-14 Jul-14 Sep-14 Nov-14 Source: GeoStat; excluding one-offs 14% 9% Jan-15 Mar-15 May-15% - Services, net CA deficit Income, net net FDI Remittances 2015F Tourism remains resilient Trade Deficit mainly driven by FDI 70% of Trade Deficit is financed by services exports (mainly tourism, with strong growth potential) and remittances (diversified by countries) 1.0 20% Trade deficit, % change, y/y 19% 20% Tourist arrivals 160 0.8 0.5 9% سلالة 9%11% 0.3 0.0 Nuwith Remittances 15% 120 10% 80 5% 40 0% 0 -0.3 -5% 0% -40 -7% -0.5 -10% -11% -80 -18% -28% Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 Sep-15 International arrivals, mn % change, y/y Source: GNTA Remittances down from Russia and Greece Inflow, US$ mn % change, y/y Source: NBG Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 80% 60% 40% 20% 0% -32.9% -20% -40% Aug-15 Sep-15 page 68#6940% 35% Prudent 2015 fiscal parameters Budget tax revenues posted a strong performance ... so did capex and privatization, while current expenditure growth was almost flat in real terms Source: Treasury Service +6.9% +182.9% 200% 3000 2500 150% +15.0% 2000 100% +47.7% 1500 50% +7.9% +29.0% 1000 +5.6% 0% 500 +7.2% -30.4% +4.2% -50% 0 -100% (VAT) Pers. Corp. income tax income tax. Excise tax Property tax Custom Other taxes duties Current spending, % change y/y Capital spending, % change y/y Privatization, % change yly ■10M13 10M14 ■10M15 ■9M13 9M14 ■9M15 Government is committed to smoother spending in 2015, while deficit financing was taking place mostly in 4Q of 2013-1014, pressuring GEL 23.1% 35.3% 30% 25% 18.7% 22.9% 20% 15% 10% 5% 0% 2013 ■1Q ■2Q Source: MOF Note: Budget expenditures as % of annual plan Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 20.1% 23.8% 2014 24.8% Source: MOF Government revised budget for 2015E growth 2% from 5%, while fiscal deficit, tax and total expenditures ratios to GDP remain unchanged 31.3% 21.9% 24.5% 25.9% 27.7% 40% 35% 30% 25% 20% 15% 10% 2015 ■3Q 4Q 2007 2008 2009 2010 2011 2012 2013 Tax revenues as % of GDP --Expenditures (capital + current) as % of GDP Source: MOF, GeoStat 2014 2015E 2016F page 69#70Contents BGEO Group PLC | Overview Results Discussion | BGEO Group PLC Results Discussion | Banking Business Results Discussion | Segments Georgian Macro Overview Appendices Analyst Coverage Express Banking Privatbank acquisition Solo Banking Healthcare comps Financial Statements Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 page 70#71Analyst coverage | BGEO Group PLC Consensus Target Price: GBP 23.4 UBS PANMURE GORDON & CO GBP 19.60 GBP 20.00 GBP 24.00 GBP 25.40 INTEGRITY IN INVESTMENT BANKING SINCE 1876 "Numis GBP 26.69 GBP 23.00 VTB Capital Renaissance Capital SBERBANK Bank of America GBP 22.66 Merrill Lynch GBP 26.00 citi HSBC Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 GBP 25.60 GBP 18.70 GBP 22.40 GBP 25.17 PEEL HUNT BARCLAYS Jefferies page 71#72Express - emerging retail banking | How Express works 1 110 Express Branches 1,053,564 Express Cards for Transport payments 3 • • Opening accounts and deposits Issuing loans and credit cards Credit card and loan repayments Cash deposit into accounts . Money transfers • Utility and other payments 2,354 Express Pay Terminals . EXPRESS PAY • Credit card repayments Loan repayments Cash deposit into accounts Loan activation Utility and other payments Mobile top-ups MetroMoney top-ups Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 საქაF3ECL განქ EXPRESS BANK OF GEORGIA PAY EXPRESS CARD 5488 VALID THRU MasterCard Metro Tbilisi Acts as payments card in metro, buses and mini-buses LOL 606 BANK OF GEORGIA EXPRESS BUSINESS 7,685 POS Terminals at 3,157 Merchants EXPRESS PAY 5583 LO MasterCard Payments via cards and Express points P2P transactions between merchant and supplier Credit limit with 0% interest rate 2 4 page 72#73Express Banking | Capturing Emerging Mass Market Customers No. of transitions '000s Express Pay terminals 18,247 Express branches 15,457 11,645 32,054 57% 13,314 ATMs 10,871 51% 8,805 82,949 70,767 14,740 ■9M15 POS terminals 10,708 x3 4,939 ■9M14 17,902 DANK OF BO EXPREAD Express cards x4 13,256 4,734 3,260 Internet banking 3,189 2,135 1.178 Mobile banking 690 195 Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 Tellers 53% x6 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 13,765,943 11,884,396 +10% 12,566,547 90,000 ■9M13 x3 page 73#74Solo a fundamentally different approach to premium banking Through the recently launched Solo, we target to attract new clients (currently only 10,328) to significantly increase market share in premium banking from c.13% SOLO Lounges SOLO Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 SOLO New Solo offers: ⚫ Tailor made banking solutions New financial products such as bonds Concierge-style environment Access to exclusive products and events Lifestyle opportunities SOLO 3x higher new clients attracted per banker ratio, compared to same period last year page 74#75Holding company of BANK OF GEORGIA GROUP BGEO www.bgeo.com GHG | LONG-TERM HIGH-GROWTH PROSPECTS/Comps (1/4) Low expenditure on healthcare services Per capita expenditure on healthcare services, current US$ (1) 8,000 6,000 4,000 2,000 1,000 500 Growth opportunities: US$ 217 expenditure per capita on healthcare services 217 Expenditure on healthcare services % of GDP (1) 16% 14% 12% 10% 8% 6% 4% 2% 0% Growth opportunities: 5.8% of GDP spent on healthcare services 5.8% Note: Healthcare services expenditure for other countries is pro-forma, based on assumption that pharmaceuticals is 17% of total spending (1) World Bank 2013 data November 2015 Source: Thailand Malaysia Georgia UAE S.Africa Saudi Thailand Malaysia Georgia page 75 UAE S.Africa Saudi#7625% 20% 15% 10% 5% 0% GHG | LONG-TERM HIGH-GROWTH PROSPECTS/Comps (2/4) Government spending on healthcare is only 6.7% of state budget and 2% of GDP General government expenditure on health as % of total government Government expenditure on health as % of GDP (1) expenditure (1) 10% 9% 8% 7% 6.7% lal 6% 5% 4% 3% 2% 1% 0% 2.0% باشل USA UK France Germany Japan Russia Turkey Estonia Poland Bulgaria Thailand Malaysia Georgia UAE Government finances only c.20% of total healthcare costs General government expenditure on health as % of total expenditure on health (1) With c.20% of government tax revenues spent on capex Total government budget, breakdown by operating and capital expenditures (2) GELM 10,000.0 90% 80% 9,000.0 70% 8,000.0 60% 7,000.0 50% 6,000.0 40% 5,000.0 30% 22% 4,000.0 20% 3,000.0 1,977 10% 2,000.0 1,446 0% 1,000.0 0.0 13% 22% 22% Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 Sources: (1) World Health Organisation and World Bank, 2013 data (2) Ministry of Finance of Georgia S.Africa Saudi 2003 2004 2005 2006 2007 2008 2009 5,719 3,947 2,993 26%. 22% 22% 22% 22% 25% 24% 2010 Capital Expenditures Current Expenditures Capital Expenditure as % of total expenditure 2011 2012 2013 2014 2015E 7,9947,861 7,462 6,920 6,685 7,023 9,335 100.0% 8,813 90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 18% 16% 19% 30.0% 20.0% 10.0% 0.0% page 76#77GHG | LONG-TERM HIGH-GROWTH PROSPECTS/Comps Capacity-wise Georgia stands alongside US, UK and Turkey Beds per 1,000 people(1) 16.0 • 84% of national bed capacity is privately owned Highly fragmented with top 5 players having 40% market share and average number of beds per hospital at 45 14.0 12.0 10.0 8.0 6.0 4.0 2.0 |.| 2.6 Physician overcapacity yet to be addressed Number of physicians per 1,000 people(1) 0505050 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 1:1.6 Nurse to Doctor USA UK France Germany Japan Russia Turkey Estonia ratio Poland Bulgaria 4.31 Thailand Malaysia Georgia UAE S.Africa Saudi With significant room for improvement in terms of service mix and quality, as indicated by: under 5 mortality rate... Under 5 mortality per 1,000 live births(1) ... and life expectancy at birth Total (years)(1) 50.0 45.0 40.0 35.0 30.0 25.0 20.0 15.0 10.0 5.0 USA - 85 80 75 70 65 13.1 60 55 الشرار Holding company of BANK OF GEORGIA BGEO www.bgeo.com November 2015 Source: (1) World Bank 2012, 2013 data GROUP 50 74 page 77 (3/4)#78GHG | LONG-TERM HIGH-GROWTH PROSPECTS/Comps (4/4) Rooms for growth - low price and low utilisation base currently GHG owns the capacity for revenue market share growth (Deka and Sunstone to be renovated in 2016-17) Low revenue per bed Average revenue per bed, US$ thousand 10x price gap with developed EM benchmarks Imedi L outpatient encounters increased to 3.9 in 2015** up from 2.2 in 2012 Price gap Prices, US$ thousands Heart Liver Knee Low outpatient encounters Outpatient encounter per capita, annual 660 USA surgery transplant replacement 100,000 300,000 48,000 418 468 210 226 40 90 98 UK Turkey Thailand 40,000 200,000 8,000 2.5 2.1 45,625 86,700 17,500 15,000 75,000 8,000 Georgia (GHG) ------ India Turkey Germany South Africa South East Asia UK US Singapore 15,000 140,000 25,000 India 5,000 45,000 6,000 Thailand ! Georgia 6,500 45,000 1,100 South Africa Georgia ------ Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 2.7 4.0 4.3 ՏՈ Malaysia UK 11.0 8.2 7.0 5.0 Poland Turkey pro-forma 1H15 result, based on Frost & Sullivan annual 2015 forecast **annualized YTD May-2015 result Sources: GHG internal reporting,; Frost & Sullivan analysis, 2015, NHA, Ministry of Labor, Health and Social Affairs of Georgia; OECD, World Health Organisation and World Bank, 2013 data page 78 Russia#79Income Statement | Quarterly BGEO Consolidated Banking Business Investment Business Eliminations INCOME STATEMENT QUARTERLY 03 2015 Q3 2014 Change Y-O-Y Q2 2015 Change Q-O-Q Q3 2015 Q3 2014 Change Y-O-Y Q2 2015 Change Q-O-Q Q3 2015 Q3 2014 Change Y-O-Y Q2 2015 Change Q-O-Q Q3 2015 Q3 2014 Q2 2015 Banking interest income 219,999 148,330 48.3% 211,869 3.8% 223,800 150,084 49.1% 215,313 3.9% Banking interest expense (93,821) (59,953) 56.5% (89,080) 5.3% (94,551) (60,107) 57.3% (88,910) 6.3% (3,801) 730 (1,754) 154 (3,444) (170) Net banking interest income 126,178 88,377 42.8% 122,789 2.8% 129,249 89,977 43.6% 126,403 2.3% (3,071) (1,600) (3,614) Fee and commission income 41,114 35,151 17.0% 38,944 5.6% 41.532 35,578 16.7% 40,160 3.4% (418) (427) (1,216) Fee and commission expense (10,323) (7,780) 32.7% (9,823) 5.1% (10,471) (7,780) 34.6% (9,988) 4.8% 148 165 Net fee and commission income 30,791 27.371 12.5% 29,121 5.7% 31,061 27,798 11.7% 30,172 2.9% (270) (427) (1,051) Net banking foreign currency gain 18,675 13,431 39.0% 19,765 -5.5% 18,675 13,431 39.0% 19,765 -5.5% Net other banking income 4,938 1,291 NMF 2,481 99.0% 5,231 1,324 295.1% 2,810 86.2% (293) (33) (329) Net insurance premiums earned 24,151 23,331 3.5% 22,566 7.0% 10,332 7,349 40.6% 9,777 5.7% 14,363 Net insurance claims incurred (14,368) (13,647) 5.3% (16,749) -14.2% (4,503) Gross insurance profit Healthcare revenue 9,783 49,670 9,684 1.0% 5,817 68.2% 5,829 (3,592) 3,757 25.4% 55.2% (6,304) 3,473 -28.6% (9,865) 67.8% 4,498 16,444 (10,055) 6,389 -12.7% 13.244 8.4% (544) (462) (455) -1.9% -29.6% (10,445) -5.6% 2,799 60.7% (544) (462) (455) 33,090 50.1% 41,217 20.5% 49,670 33,090 50.1% 41,217 20.5% Cost of healthcare services. (27,552) (18,853) 46.1% (23,118) 19.2% (27,552) (18,853) 46.1% (23,118) 19.2% Gross healthcare profit 22,118 14,237 55.4% 18,099 22.2% 22,118 14,237 55.4% 18,099 22.2% Real estate revenue 981 17,160 -94.3% 1,716 -42.8% 981 17,160 -94.3% 1,716 -42.8% Cost of real estate (230) (15,906) -98.6% (1,757) -86.9% (230) (15,906) -98.6% (1,757) -86.9% Gross real estate profit Gross other investment profit 751 3,373 1,254 3,577 -40.1% -5.7% (41) 4,734 NMF 751 1,254 -40.1% (41) NMF -28.7% 3,229 3,580 -9.8% 4,709 -31.4% 144 (3) 25 Revenue 216,607 159,222 36.0% 202,765 6.8% Salaries and other employee benefits (47,385) (40,341) 17.5% (45,044) 5.2% Administrative expenses (21,044) (17,937) 17.3% (22,102) -4.8% Banking depreciation and amortisation (8,505) (6,408) 32.7% (8,338) 2.0% Other operating expenses (628) Operating expenses (77,562) Operating income before cost of credit risk/ EBITDA 139,045 (877) (65,563) 93,659 -28.4% (1,364) -54.0% 190.045 (39,768) (17,320) (8,505) (574) 136,287 (33,630) 39.4% 18.3% 182,623 4.1% 30,596 25,460 20.2% 25.566 19.7% (4,034) (2,525) (5,424) (38,066) 4.5% (8,143) (7,183) 13.4% (7,460) 9.2% 526 472 482 18.3% (76,848) 0.9% Profit from associates 1,444 48.5% 125,917 1,979 10.4% -27.0% (66,167) 123,878 (14,079) 23.0% (17,899) (6,408) 32.7% (8,338) (601) -4.5% (941) (54,718) 20.9% (65,244) -3.2% (4,047) (4,025) 0.5% (4,498) -10.0% 323 167 295 2.0% , -39.0% (54) 1.4% (12,244) (276) (11,484) -80.4% (423) -87.2% 6.6% (12,381) -1.1% 849 639 777 81,569 51.9% 117,379 5.5% 18,352 1,444 13,976 31.3% 13,185 39.2% (3,185) (1,886) (4,647) 1,979 -27.0% Depreciation and amortization of investment. business (4,227) (2,352) 79.7% (2,579) 63.9% (4,227) (2,352) 79.7% (2,579) 63.9% Net foreign currency gain from investment business (2,311) Interest income from investment business. 499 Interest expense from investment business. (2,080) (281) 252 (1,872) NMF 98.0% 2,689 622 NMF (2,311) (281) NMF 2,689 NMF -19.8% 719 406 77.1% 844 -14.8% (220) (154) (222) 11.1% (2,632) -21.0% (5,485) (3,912) 40.2% (7,501) -26.9% 3.405 2.040 4,869 Operating income before cost of credit risk 132,370 89,406 48.1% 125,996 5.1% Impairment charge on loans to customers (34,857) (15,852) 119.9% (35,105) -0.7% 123.878 (34,857) 81,569 51.9% (15,852) 119.9% 117.379 5.5% 8,492 7,837 8.4% 8.617 -1.5% (35,105) -0.7% Impairment charge on finance lease receivables. Impairment charge on other assets and provisions 156 17 NMF (1,779) NMF 156 17 NMF (1,779) NMF (946) 530 NMF (4,983) -81.0% (51) 972 NMF (3,880) -98.7% (895) (442) 102.5% (1,103) -18.9% Cost of credit risk (35,647) (15,305) 132.9% (41,867) -14.9% (34,752) Net operating income before non-recurring items 96,723 74,101 30.5% 84,129 15.0% 89,126 Net non-recurring items (5,489) (727) NMF (413) NMF (4,967) Profit before income tax. 91,234 73,374 24.3% 83,716 9.0% 84,159 (14,863) 66,706 (718) 65,988 133.8% (40,764) -14.7% (895) (442) 102.5% (1,103) -18.9% 33.6% 76,615 16.3% 7,597 7,395 2.7% 7,514 1.1% NMF (3,409) 45.7% (522) (9) NMF 2,996 NMF 27.5% 73,206 15.0% 7,075 7.386 -4.2% 10,510 -32.7% Income tax expense (10,329) (11,066) -6.7% (11,686) -11.6% Profit 80,905 62,308 29.8% 72,030 12.3% (10,757) 73,402 (10,353) 3.9% (11,753) -8.5% 428 (713) NMF 67 NMF 55,635 31.9% 61,453 19.4% 7,503 6,673 12.4% 10.577 -29.1% Attributable to: -shareholders of the Group 78,167 59.937 30.4% 70,601 10.7% 71,830 54,740 31.2% 60,963 17.8% 6,337 5,197 21.9% 9,638 -34.2% -non-controlling interests 2,738 2.371 15.5% 1,429 91.6% 1,572 895 75.6% 490 NMF 1,166 1,476 -21.0% 939 24.2% Earnings per share (basic) 2.04 1.74 17.2% 1.84 10.9% Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 page 79#80INCOME STATEMENT NINE MONTH Income Statement | Nine Month BGEO Consolidated Sep-15 Sep-14 Change Sep-15 Banking Business Sep-14 Investment Business Eliminations Y-O-Y Change Y-O-Y Sep-15 Sep-14 Change Y-O-Y Sep-15 Sep-14 Change Y-O-Y Banking interest income Banking interest expense Net banking interest income Fee and commission income 631,566 (261,610) 432,243 46.1% 641,466 437,095 46.8% (180,418) 45.0% (262,756) (180,887) 45.3% 369,956 251,825 46.9% 378,710 256.208 47.8% 116,049 97,966 18.5% 119,036 99,623 19.5% Fee and commission expense (29,282) (24,533) 19.4% (29,712) (24,533) 21.1% Net fee and commission income 86,767 73,433 18.2% 89,324 75,090 19.0% (9,900) 1,146 (4,852) 104.0% 469 144.3% (8,754) (4,383) 99.7% (2,987) (1,657) 80.3% 430 (2,557) (1,657) 54.3% Net banking foreign currency gain 57,401 36,131 58.9% 57,401 36,131 58.9% Net other banking income 9,209 4,397 109.4% 10,137 4,743 113.7% (928) (346) 168.2% Net insurance premiums earned 68,426 77,950 -12.2% 29,351 20,383 44.0% Net insurance claims incurred (45,252) (52,208) -13.3% (14,745) (8,435) 74.8% 40,497 (30,507) 58,889 -31.2% (1,422) (1,322) 7.6% (43,773) -30.3% Gross insurance profit 23,174 25,742 -10.0% 14,606 11,948 22.2% 9,990 15,116 -33.9% (1,422) (1,322) 7.6% Healthcare revenue 130,904 85,681 52.8% 130,904 85,681 52.8% Cost of healthcare services (73,810) (48,506) 52.2% (73,810) (48,506) 52.2% Gross healthcare profit 57,094 37,175 53.6% 57,094 37,175 53.6% Real estate revenue 6,771 50,204 -86.5% 6,771 50,284 -86.5% (80) -100.0% Cost of real estate (4,852) (39,371) -87.7% (4,852) (39,371) -87.7% Gross real estate profit 1,919 10,833 -82.3% 1,919 10,913 -82.4% (80) -100.0% Gross other investment profit 9,506 9,439 0.7% 9,481 9,321 1.7% 25 118 -78.8% Revenue 615,026 448,975 37.0% 550,178 384.120 43.2% 78,484 72,525 8.2% (13,636) (7,670) 77.8% Salaries and other employee benefits (138,171) (113,488) 21.7% (116,440) (95,310) 22.2% (23,134) (19,269) 20.1% 1,403 1,091 28.6% Administrative expenses (64,203) (52,710) 21.8% (52,724) (42,026) 25.5% (12,575) (11,539) 9.0% 1,096 855 28.2% Banking depreciation and amortisation (25,216) (18,930) 33.2% (25,216) (18,930) 33.2% Other operating expenses (2,880) (2,638) 9.2% (2,307) (2,227) 3.6% Operating expenses (230,470) (187,766) 22.7% (196,687) (158,493) 24.1% (573) (36,282) (411) 39.4% (31,219) 16.2% 2,499 1,946 Operating income before cost of credit risk / EBITDA 384,556 261,209. 47.2% 353,491 225,627 56.7% 42,202 41,306 2.2% (11,137) (5,724) 28.4% 94.6% Profit from associates. 2,112 2,112 Depreciation and amortization of investment business. (9,494) (6,837) 38.9% (9,494) (6,837) 38.9% Net foreign currency gain from investment business. 4,067 (2,130) NMF 4,067 (2,130) NMF Interest income from investment business Interest expense from investment business Operating income before cost of credit risk 1,738 984. 76.6% 2,381 1,386 71.8% (643) (402) 60.0% (7,171) (5,621) 27.6% (18,951) (11,747) 61.3% 11,780 6,126 92.3% 375,808 247,605 51.8% 353,491 Impairment charge on loans to customers (108,890) (32,778) NMF (108,890) 225,627 (32,778) 56.7% 22,317 21,978 1.5% NMF Impairment charge on finance lease receivables (1,742) (340) NMF (1,742) (340) NMF Impairment charge on other assets and provisions (8,724) (9,350) -6.7% (5,655) (7,824) -27.7% (3,069) (1,526) 101.1% Cost of credit risk (119,356) (42,468) 181.0% (116,287) (40,942) 184.0% (3,069) (1,526) 101.1% Net operating income before non-recurring items 256,452 205,137 25.0% 237,204 184,685 28.4% 19,248. 20,452 -5.9% Net non-recurring items (8,349) (8,924) -6.4% (10,543) (10.320) 2.2% 2,194 1,396 57.2% Profit before income tax 248,103 196,213 26.4% 226,661 174,365 30.0% 21,442 21,848 -1.9% Income tax expense (32,829) (21,924) 49.7% (32,995) (18,837) 75.2% 166 (3,087) NMF 215,274 174,289 23.5% 193,666 155,528 24.5% 21,608 18,761 15.2% Profit Attributable to: -shareholders of the Group non-controlling interests Earnings per share (basic) Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 211,408 168,284 25.6% 191,041 152,843 25.0% 20,367 15.441 31.9% 3,866 5.51 6,005 -35.6% 2,625 2,685 -2.2% 1,241 3,320 -62.6% 4.89 12.7% page 80#81Balance Sheet | 30 September 2015 BGEO Consolidated Banking Business Investment Business Eliminations BALANCE SHEET Sep-15 Sep-14 Change Jun-15 Y-O-Y Change Q-O-Q Sep-15 Sep-14 Change Y-O-Y Jun-15 Change Q-O-Q Sep-15 Sep-14 Change Jun-15 Change Sep-15 Sep-14 Jun-15 Y-O-Y Q-O-Q Cash and cash equivalents 1,320,319 759,639 Amounts due from credit institutions 706,500 897,965 Investment securities. Loans to customers and finance lease receivables 5,266,125 372,042 617,700 3,818,742 73.8% 1,261,805 89.9% 45.4% 4.6% 37.9% 583,888 895,840 5,052,752 21.0% 0.2% 1,314,696 698,110 900,845 4.2% 5,367,311 756,397 355,786 616,547 3,897,160 96.2% 46.1% 37.7% 73.8% 1,252,758 575,534 898,457 5,142,221 4.9% 166,031 50,821 226.7% 107,511 54.4% (160,408) (47,579) (98,464) 21.3% 19,628 23,540 -16.6% 18,844 4.2% (11,238) (7,284) (10,490) 0.3% 1,153 1,153 0.0% 1,153 0.0% (4,033) (3,770) 4.4% (101,186) (78,418) (89,469) Accounts receivable and other loans. 87,348 62,830 Insurance premiums receivable 55,700 40,330 Prepayments 148,777 Inventories Investment property 224,028 185,316 775,599 562,342 39.0% 36,555 52.4% 34,945 15.4% 85,132 74.8% 20.9% 37.9% 77,866 58,142 12.2% 13,291 -4.2% 28,413 6,501 14,961 104.4% 15,474 -14.1% 79,989 57,041 40.2% 70,343 13.7% 89.9% 26,519 7.1% 29,165 22,636 28.8% 32,023 -8.9% (5,932) (1,878) (712) (7,951) (1,042) (400) 52,145 -22.7% 131,534 21,374 19,928 7.3% 30,779 -30.6% 18,956 15,017 26.2% 21,366 -11.3% 13.1% 10,929 6,122 78.5% 10,379 5.3% 137,848 79,010 74.5% 121,155 13.8% 221,506 1.1% 143,469 121,359 18.2% 143,873 -0.3% 80,559 63,957 26.0% 77,633 3.8% 669,153 15.9% 339,300 301,004 12.7% 338,858 0.1% 436,299 261,338 66.9% 330,295 32.1% Property and equipment 70,876 49,796 42.3% 60,056 18.0% 49,592 38,538 28.7% 48,092 3.1% 21,284 11,258 89.1% 11,964 77.9% Goodwill Intangible assets 38,438 30,019 28.0% 36,894 4.2% 34,390 27,732 24.0% 33,260 3.4% 4,048 2,287 77.0% 3,634 11.4% 38,666 39,999 -3.3% 29,080 33.0% Income tax assets Other assets 267,218 160,613 66.4% 9,937,889 6,815,670 45.8% Total assets 4,477,908 Client deposits and notes 2,115,859 3,088,254 1,264,299 45.0% 67.4% 244,398 9,375,059 4,104,417 2,139,517 9.3% 6.0% 30,938 187,378 147,220 9,140,036 6,340,444 31,189 -0.8% 21,686 42.7% 7,728 8,810 -12.3% 7,394 4.5% 9.1% -1.1% Amounts due to credit institutions 1,076,137 794,951 Debt securities issued 166,435 98,953 35.4% 68.2% 1,063,123 132,832 1.2% 25.3% 4,649,572 3,142,980 2,011,801 1,167,556 999,959 768,315 16,629 30.1% 27.3% 174,820 44.2% 8,712,710 47.9% 4,212,822 72.3% 2,045,093 990,257 7.2% 4.9% 91,997 1,094,685 14,323 611,191 542.3% 80,058 79.1% 883,373 14.9% 23.9% 10.4% -1.6% 209,898 175,299 19.7% 189,124 11.0% 1.0% 83,549 27,023 209.2% 79,894 4.6% (12,157) (296,832) (135,965) (171,664) (54,726) (105,840) (78,556) (7,371) (387) (930) (10,480) (221,024) (108,405) (94,700) (7,028) 13,028 27.6% 14,369 15.7% Accruals and deferred income 149,806 85,925 74.3% 118,463 26.5% 66,608 57,637 15.6% 73,001 -8.8% 40,369 35,099 15.0% 42,910 -5.9% 26,239 22,538 16.4% 30,091 -12.8% Insurance contracts liabilities 127,490 104,692 21.8% 111,387 14.5% 96,214 88,136 9.2% 87,392 10.1% 31,276 16,556 88.9% 23,995 30.3% Income tax liabilities Other liabilities 149,493 8,179,930 78,653 5,487,439 90.1% 49.1% 94,839 57.6% 77,454 40,694 90.3% 71,126 8.9% 83,996 40,256 7,719,116 6.0% 7,891,998 5,255,808 50.2% 7,463,969 5.7% 584,764 367,597 108.7% 59.1% 34,604 142.7% 476,171 22.8% Total liabilities (11,957) (2,296) (10,891) (296,832) (135,965) (221,024) Share capital 1,154 252,090 1,024 40,909 516.2% 12.7% 1,154 0.0% 1,154 1,024 243,482 3.5% 40,622 37,470 12.7% 8.4% 1,154 0.0% 32,277 25.9% 211,468 3,439 Additional paid-in capital 6049.1 % 211,205 0.1% Treasury shares (36) (74,266) Other reserves Retained earnings Total equity attributable to shareholders (43) -16.3% (47,298) 57.0% 1,488,963 1,276,801 16.6% 1,667,905 31.2% 1,271,393 (36) 0.0% (61,509) 20.7% 1,413,870 1,596,961 5.3% 4.4% (36) (43) (64,648) (33,760) 1,252,178 1,061,747 1,229,270 1,066,438 -16.3% (36) 0.0% 91.5% (51,917) 24.5% 17.9% 1,247,508 0.4% 15.3% 1,228,986 0.0% (9,618) 236,785 438,635 (13,538) 215,054 204,955 -29.0% 10.1% 114.0% (9,592) 0.3% 166,362 42.3% 367,975 19.2% of the Group Non-controlling interests Total equity 90,054 1,757,959 56,838 1,328,231 58.4% 32.4% 58,982 52.7% 1,655,943 6.2% 18,768 1,248,038 18,198 1.084,636 3.1% 15.1% 19,755 1,248,741 -5.0% -0.1% Total liabilities and equity 9,937,889 6,815,670 45.8% 9,375,059 6.0% 9,140,036 6,340,444 44.2% 8,712,710 4.9% 71,286 509,921 1,094,685 38,639 243,594 84.5% 109.3% 611.191 79.1% 39,227 407,202 883,373 81.7% 25.2% 23.9% (296,832) (135,965) (221,024) Book value per share 43.60 36.97 17.9% 41.74 4.5% Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 page 81#82GHG | 9M15 Financial Results (1/2) Income Statement Healthcare services Medical insurance Eliminations Total (GEL thousands, unless otherwise noted) Change 9M15 9M14 9M15 9M14 y-0-y Change y-o-y Change 9M15 9M14 9M15 9M14 y-0-y Revenue 137,028 101,849 34.5% 40,724 59,171 -31.2% 6,322 18,309 171,430 142,711 20.1% Costs of services 77,283 59,444 30.0% 33,158 50,271 -34.0% 6,125 18,090 104,317 91,625 13.9% Cost of salaries and other employee benefits 49,759 38,420 29.5% 2,236 7,412 47,522 31,008 53.3% Cost materials and supplies 20,226 12,582 60.8% 909 2,427 19,317 10,155 90.2% Cost of providers 1,830 3,629 -49.6% 82 828 1,748 2,801 -37.6% Cost of utilities and other 5,469 4,813 13.6% 246 923 5,223 3,890 34.3% Net insurance claims incurred 33,158 50,271 -34.0% 2,651 6,499 30,507 43,772 -30.3% Gross profit 59,745 42,405 40.9% 7,566 8,900 -15.0% 197 219 67,113 51,086 31.4% Salaries and other employee benefits 16,897 11,122 51.9% 3,006 3,575 -15.9% 197 219 19,706 14,479 36.1% General and administrative expenses 5,641 4,786. 17.9% 1,821 1,856 -1.9% 2 7,460 6,642 12.3% Impairment of healthcare services, insurance premiums 2,680 1,321 103.0% 156 352 -55.8% 2,836 1,673 69.5% and other receivables Other operating income (expense) 2,461 1,318 86.7% 46 117 -60.3% 2 2,505 1,435 EBITDA 36,987 26,494 39.6% 2,630 3,233 -18.7% 39,617 29,727 33.3% EBITDA margin 26.5% 25.5% 6.5% 5.5% Depreciation and amortization (7,927) (5,185) 52.9% (444) (475) -6.6% (8,371) (5,660) 47.9% Net interest income (expense) (14,817) (9,505) 55.9% (87) 261 (14,904) (9,244) 61.2% Net gains/(losses) from foreign currencies 2,898 (2,654) 792 150 427.8% 3,690 (2,504) Net non-recurring income/(expense) (1,443) 1,369 (46) (31) (1,489) 1,338 Profit before income tax expense 15,697 10,519 49.2% 2,845 3,138 -9.3% 18,542 13,657 35.8% Income tax expense 512 (855) (491) (482) 1.8% 22 (1,337) Profit for the period 16.210 9,664 67.7% 2,354 2,656 -11.4% 18,564 12.320 50.7% Attributable to: - shareholders of the Group 13,473 7,444 81.0% 2,354 2,656 -11.4% 15,827 10,100 56.7% - non-controlling interests 2,737 2,220 23.3% 2,737 2,220 Holding company of BANK OF GEORGIA BGEO GROUP www.bgeo.com November 2015 Sources: GHG internal reporting, financials are for 9M15#83GHG | 9M15 Financial Results (2/2) Revenue from healthcare services by payment sources Revenue from medical insurance by payment sources Change (GEL thousands, unless otherwise noted) 9M15 9M14 V-O-V (GEL thousands, unless otherwise noted) 9M15 9M14 Change y-0-V Referral and specialty hospitals 119,962 85,726 39.9% Community hospitals 13,332 9,797 36.1% Ambulatory clinics 3,734 3,463 Ambulance and rural primary care 7.8% 2,862 -100.0% Private medical insurance products State funded medical insurance products Total 40,724 31,262 27,909 -100.0% 30.3% 40,724 59,171 -31.2% Total 137,028 101,849 34.5% Revenue from healthcare services by business lines Selected Balance Sheet items Change (GEL thousands, unless otherwise noted) 9M15 9M14 y-0-y (GEL thousands, unless otherwise noted) Change 9M15 9M14 V-0-y Government-funded healthcare programs 102,602 48,137 113.1% Total assets, of which: 622,021 365,441 70.2% Out-of-pocket payments by patients 25,990 23,757 9.4% Premises and equipment, net 424,304 249,229 70.2% Private insurance companies, of which: Imedi L health insurance 8,437 29,955 -71.8% 6,125 18,090 -66.1% Total liabilities, of which: Borrowed funds 372,791 222,808 67.3% 223,339 140,413 59.1% Total 137,028 101,849 34.5% Total shareholders' equity: 249,230 142,633 74.7% Holding company of BANK OF GEORGIA BGEO www.bgeo.com Sources: GHG internal reporting, financials are for 9M15 November 2015 GROUP#84Selected Financial Information Belarusky Narodny Bank (BNB INCOME STATEMENT, HIGHLIGHTS GEL thousands, unless otherwise stated. 3Q15 3Q14 Change y-o-y 2Q15 Change 9M15 9M14 Change q-o-q y-o-y Net banking interest income 7,650 4,977 53.7% 6,638 15.2% 21,717 16,151 34.5% Net fee and commission income 2,149 2,442 -12.0% 2,699 -20.4% 7,065 6,783 4.2% Net banking foreign currency gain 6,340 2,153 194.5% 3,668 72.8% 15,025 5,081 195.7% Net other banking income 190 91 108.8% 137 38.7% 424 364 16.5% Revenue 16,329 9,663 69.0% 13,142 24.3% 44,231 28,379 55.9% Operating expenses (4,722) (4,435) 6.5% (4,687) Operating income before cost of credit risk 11,607 5,228 122.0% 8.455 0.7% 37.3% (13,664) (13,073) 4.5% 30,567 15,306 99.7% Cost of credit risk (1,292) (539) 139.7% (5,683) -77.3% (11,619) (2,141) NMF Net non-recurring items (323) (293) 10.2% (318) 1.6% (1,739) (2,408) -27.8% Profit before income tax 9,992 4,396 127.3% 2,454 307.2% 17,209 10,757 60.0% Income tax (expense) benefit Profit (2,342) (862) 171.7% (785) 198.3% (4,554) 715 NMF 7,650 3,534 116.5% 1,669 358.4% 12,655 11,472 10.3% BALANCE SHEET, HIGHLIGHTS 30-Sep-15 30-Sep-14 GEL thousands, unless otherwise stated Change y-o-y 30-Jun-15 Change q-o-q Cash and cash equivalents 95,395 70,390 35.5% 67,632 41.1% Amounts due from credit institutions 3,769 3,380 11.5% 3,636 3.7% Loans to customers and finance lease receivables 315,006 215,788 46.0% 305,816 3.0% Total assets 481,498 346,025 39.2% 444,377 8.4% Client deposits and notes, of which: 270,548 180,328 50.0% 242,249 11.7% Amounts due to credit institutions, of which: 120,115 77,976 54.0% 114,161 5.2% Debt securities issued 5,640 -100.0% Total liabilities 399,637 270,242 47.9% 363,782 9.9% Total equity attributable to shareholders of the Group 67,989 62,725 8.4% 66,953 1.5% Non-controlling interests 13,872 13,058 6.2% 13,642 1.7% Total equity 81,861 75,783 8.0% 80,595 1.6% Total liabilities and equity 481,498 346,025 39.2% 444,377 8.4% Holding company of BANK OF GEORGIA BGEO GROUP www.bgeo.com November 2015 page 84#85Selected Financial Information P&C Insurance (Aldagi) INCOME STATEMENT GEL thousands, unless otherwise stated 3Q15 3Q14 Change 2Q15 y-o-y Change q-o-q 9M15 9M14 Change y-o-y Net banking interest income 628 113 NMF 567 10.8% 1,741 248 NMF Net fee and commission income 80 87 -8.0% 72 11.1% 223 241 -7.5% Net banking foreign currency gain (1,096) 6 NMF 1,687 NMF 1,119 60 NMF Net other banking income 254 108 135.2% Gross insurance profit 6,297 4,076 54.5% 90 3,853 182.2% 641 398 61.1% 63.4% 15,757 12,840 22.7% Revenue 6,163 4,390 40.4% 6,269 -1.7% 19,481 13,787 41.3% Operating expenses (2,959) (2,245) 31.8% (2,524) 17.2% (8,453) (6,412) 31.8% Operating income before cost of credit risk 3,204 2,145 49.4% 3,745 -14.4% 11,028 7,375 49.5% Cost of credit risk (199) (44) NMF (172) 15.7% (466) (371) 25.6% Profit before income tax 3,005 2,101 43.0% 3,573 -15.9% 10,562 7,004 50.8% Income tax (expense) benefit Profit (503) (278) 80.9% (150) NMF (265) (1,101) -75.9% 2,502 1,823 37.2% 3.423 -26.9% 10,297 5,903 74.4% Holding company of BANK OF GEORGIA BGEO GROUP www.bgeo.com November 2015 page 85#86Key ratios and operating data Banking Business Key ratios, Profitability ROAA, Annualised ROAE, Annualised Net Interest Margin, Annualised Loan Yield, Annualised 3Q15 3Q14 2Q15 9M15 9M14 Selected Operating Data: 3Q15 3Q14 2Q15 9M15 9M14 Total Assets Per FTE, BOG Standalone 2,060 1,738 1,995 2,060 1,738 Number Of Active Branches, Of Which: 260 217 246 260 217 3.3% 3.5% 2.9% 3.1% 3.3% - Flagship Branches 35 34 35 35 34 23.3% 21.0% 19.3% 20.6% 19.8% - Standard Branches 115 100 114 115 100 7.6% 7.6% 7.6% 7.7% 7.5% 14.7% 14.2% 14.6% 14.7% 14.4% - Express Branches (including Metro) Number Of ATMs 110 83 97 110 83 703 521 685 703 521 Liquid assets yield, Annualised 3.1% 2.6% 3.1% 3.2% 2.4% Number Of Cards Outstanding, Of Which: 1,940,627 Cost of Funds, Annualised 5.1% 4.7% 5.0% 5.1% 4.8% - Debit cards 1,210,914 Cost of Client Deposits and Notes, annualised 4.1% 4.1% 4.4% 4.3% 4.3% - Credit cards 729,713 Cost of Amounts Due to Credit Institutions, annualised 6.3% 4.8% 5.3% 5.7% 4.8% Number Of POS Terminals 7,685 1,103,066 1,964,374 986,477 1,207,573 116,589 5,979 1,940,627 1,103,066 1,210,914 986,477 756,801 729,713 116,589 7,668 7,685 5,979 Cost of Debt Securities Issued 7.3% 7.1% 7.2% 7.3% 7.2% Operating Leverage, Y-O-Y 18.5% -3.4% 21.7% 19.1% -3.3% Operating Leverage, Q-O-Q Efficiency Cost / Income Liquidity NBG Liquidity Ratio 2.7% 5.1% 2.9% n/a n/a Group Employee Data 3Q15 3Q14 2Q15 34.8% 40.1% 35.7% 35.7% 41.3% Full Time Employees, Group, Of Which: - Full Time Employees, BOG Standalone 15,624 13,182 14,583 4,436 3,649 4,368 - Full Time Employees, Georgia Healthcare Group - Full Time Employees, m2 9,434 8,026 8,496 59 52 58 40.5% 37.8% 35.1% 40.5% 37.8% - Full Time Employees, Aldagi 246 240 253 Liquid Assets To Total Liabilities 36.9% 32.9% 36.5% 36.9% 32.9% - Full Time Employees, BNB 537 455 505 Net Loans To Client Deposits and Notes 115.4% 124.0% 122.1% 115.4% 124.0% - Full Time Employees, Other 912 760 903 Net Loans To Client Deposits and Notes + DFIS Leverage (Times) 95.9% 6.3 104.6% 102.4% 95.9% 4.8 6.0 6.3 104.6% 4.8 Asset Quality: NPLs (in GEL) 221,660 NPLs To Gross Loans To Clients 4.0% NPL Coverage Ratio 82.0% 154,417 3.8% 78.1% 219,230 4.1% 82.2% NPL Coverage Ratio, Adjusted for discounted value of collateral 121.9% 112.1% 115.1% Cost of Risk, Annualised 2.5% 1.6% 2.7% 221,660 4.0% 82.0% 121.9% 2.8% 154,417 3.8% 78.1% 112.1% 1.2% Shares outstanding Ordinary shares outstanding Treasury shares outstanding 30-Sep-15 31-Jun-15 30-Sep-14 38,257,793 38,257,793 34,387,198 1,242,527 1,242,527 1,522,185 Capital Adequacy: BIS Tier I Capital Adequacy Ratio, Consolidated 16.7% 22.7% 20.4% 16.7% 22.7% BIS Total Capital Adequacy Ratio, Consolidated 23.7% 26.4% 26.7% 23.7% 26.4% New NBG (Basel II) Tier I Capital Adequacy Ratio 10.2% 11.2% 10.4% 10.2% 11.2% New NBG (Basel II) Total Capital Adequacy Ratio 15.8% 14.2% 15.9% 15.8% 14.2% Old NBG Tier I Capital Adequacy Ratio 9.2% 14.5% 13.9% 9.2% 14.5% Old NBG Total Capital Adequacy Ratio 16.0% 14.1% 15.8% 16.0% 14.1% Risk Weighted Assets Change Risk Weighted Assets breakdown GEL millions 30-Sep-15 30-Jun-15 30-Sep-14 Y-O-Y, % Q-0-Q, % Credit risk weighting FX induced credit risk (market risk) Operational risk weighting Total RWA under NBG Basel 2/3 6,001,552 5,930,369 4,483,578 1,846,755 1,795,351 1,412,299 624,825 624,825 8,473,132 8,350,545 6,470,594 33.9% 1.2% 30.8% 2.9% 574,717 8.7% 0.0% 30.9% 1.5% Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 page 86#87Notes to Key Ratios 1 Return on average total assets (ROAA) equals Profit for the period divided by monthly average total assets for the same period; 2 Return on average total equity (ROAE) equals Profit for the period attributable to shareholders of the Group divided by monthly average equity attributable to shareholders of the Group for the same period; 3 Net Interest Margin equals Net Banking Interest Income of the period divided by monthly Average Interest Earning Assets Excluding Cash for the same period; Interest Earning Assets Excluding Cash comprise: Amounts Due From Credit Institutions, Investment Securities (but excluding corporate shares) and net Loans To Customers And Finance Lease Receivables; 4 Loan Yield equals Banking Interest Income From Loans To Customers And Finance Lease Receivables divided by monthly Average Gross Loans To Customers And Finance Lease Receivables; 5 Cost of Funds equals banking interest expense of the period divided by monthly average interest bearing liabilities; interest bearing liabilities include: amounts due to credit institutions, client deposits and notes and debt securities issued; 6 Operating Leverage equals percentage change in revenue less percentage change in operating expenses; 7 Cost Income Ratio equals operating expenses divided by revenue; 8 Daily average liquid assets (as defined by NBG) during the month divided by daily average liabilities (as defined by NBG) during the month; 9 Liquid assets include: cash and cash equivalents, amounts due from credit institutions and investment securities; 10 Leverage (Times) equals total liabilities divided by total equity; 11 NPL Coverage Ratio equals allowance for impairment of loans and finance lease receivables divided by NPLs; 12 NPL Coverage Ratio adjusted for discounted value of collateral equals allowance for impairment of loans and finance lease receivables divided by NPLs (discounted value of collateral is added back to allowance for impairment) 13 Cost of Risk equals impairment charge for loans to customers and finance lease receivables for the period divided by monthly average gross loans to customers and finance lease receivables over the same period; 14 BIS Tier I Capital Adequacy ratio equals Tier I Capital divided by total risk weighted assets, both calculated in accordance with the requirements of Basel Accord I; 15 BIS Total Capital Adequacy ratio equals total capital divided by total risk weighted assets, both calculated in accordance with the requirements of Basel Accord I; 16 New NBG (Basel 2/3) Tier I Capital Adequacy ratio equals Tier I Capital divided by total risk weighted assets, both calculated in accordance with the requirements the National Bank of Georgia instructions; 17 New NBG (Basel 2/3) Total Capital Adequacy ratio equals total capital divided by total risk weighted assets, both calculated in accordance with the requirements of the National Bank of Georgia instructions; 18 Old NBG Tier I Capital Adequacy ratio equals Tier I Capital divided by total risk weighted assets, both calculated in accordance with the requirements the National Bank of Georgia instructions; 19 Old NBG Total Capital Adequacy ratio equals total capital divided by total risk weighted Assets, both calculated in accordance with the requirements of the National Bank of Georgia instructions; Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 page 87#88BGEO Group | Company Information Registered Address 84 Brook Street London W1K 5EH United Kingdom www.bgeo.com Registered under number 7811410 in England and Wales Incorporation date: 14 October 2011 Stock Listing London Stock Exchange PLC's Main Market for listed securities Ticker: "BGEO.LN" Contact Information BGEO Group Investor Relations Telephone: +44 (0) 20 3178 4052 E-mail: [email protected] www.bgeo.com Auditors Ernst & Young LLP 1 More London Place London SE1 2AF United Kingdom Registrar Computershare Investor Services PLC The Pavilions Bridgewater Road Bristol BS13 8AE United Kingdom Share price information BGEO Group shareholders can access both the latest and historical prices via our website, www.bgeo.com Holding company of BANK OF GEORGIA BGEO www.bgeo.com GROUP November 2015 page 88